dig once, build twice, you know? we have a lot of infrastructure, roads and bridges and all these things that have to be re-- we have to invest in them. it's good investment, it's important for our country. you could also lay our broadband while you're doing it, there's tons of money out there to follow that line, and i think that's a worthy way to go about investing in two things at once, three things at once, trying to collaborate on those things. >> do you think communications infrastructure falls neatly under -- so president obama's famous line about you didn't build that, the sentence right after that he referenced the internet, talking about how that was, you know, built, you know, with government, um, investment into that as well. do you think that future communication networks, do you think that falls under his philosophy of kind of building that framework for private innovation?

>> guest: i think a lot of when you talk about innovation, there's a number -- i mean, clearly, the government has a role to play in a variety of arenas to insure fair play and competitivend, but also to boost innovation in different ways. and if you look at the manner in which the railroads got built or the internet got built, all those thing, government was clearly involved and important. they wouldn't have happened in many ways otherwise, they also wouldn't have happened without the private sector. again, it's not an either/or situation in my opinion. it's trying to find that balance, as you say, between where the government helps and where the time comes when the government needs to step back because the industry's up and running, and then it just needs to make sure that everything is regulated well, fair play going forward. >> host: gentlemen, we're out of time, but very quickly, john kneuer, do these issues that we've talked about and piracy and privacy, do they move the political needle? are people paying attention to these issues? >> guest: i think the universe of people who are going to enter

the booth on november 6th that base their decision on esoteric issues is very small. however, they are important issues for the economy and the country. the fact you haven't seen this being a top-level topic for the either the obama administration or the romney campaign team is just indicative of the fact that, you know, it's not really a campaign issue. but i think you will see that it's a very important governance issue, and i expect both sides to be prepared to vote significant -- devote significant energy and effort to it should they be the administration. >> guest: um, i'll take a different tack on that. i think the american people understand that investment in innovation is hugely important to their well being, to their opportunities for jobs, opportunities for jobs for their kids and their grandkids. i think they understand that, and i think they see investment in that is, essentially, investments in the middle class. and they understand that that's what we need to grow to be a prosperous country in the 21st

century like we were in the 20th. so i think it'll weigh heavily in a way. i mean, no one's -- as i say, no one's going into the booth saying i'm voting for innovation. but they're going in saying i'm voting to improve my life. i think that'll be part of it. >> host: ed paisley, john kneuer and josh smith, thank you all for being on "the communicators" this week. >> guest: thank you. >> guest: thank you. >> watch and engage with c-span's road to the white house coverage as the presidential candidates meet this tuesday for a town hall-style debate. just ahead, a discussion on the economic effects of potential cuts to the military. after that, a debate between the candidates vying to succeed new hampshire governor john lynch. then, a firsthand look at the political unrest in egypt, syria and libya by a fellow with the new america foundation who recently travel today the middle east. traveled to the middle east. and later retired supreme court justice john paul stevens speaks to a conference about gun laws,

gun violence and his dissents in the court's cases involving the second amendment. >> c-span brings a special perspective into what's happening in washington, particularly your coverage of the house and the senate. so if something is going on in the house and the senate -- andw something will go on in the next five years, maybe not this7 year -- c-span covers this authoritatively, very, very well, and it's one of the major news sources or news happenings in washington. we're all struggling with what's going to happen with health care. i mean, c-span was the authoritative voice covering what happened with health care. we're worried about the financial system. c-span, again, is the authoritative voice in terms of what the congress is doing or won't do in terms of the financial system. >> ken gun they are watches c-span on comcast. c-span, created by america's cable companies in 1979, brought to you as a public service by

your television provider. >> now, a panel discusses the potential effects of defense cuts on the economy. automatic spending cuts, including $500 billion in defense cuts over the next decade, will take effect in january if congress fails to approve $1.2 trillion in deficit reduction. this 90-minute forum was hosted by the cato institute. >> good afternoon. i'm christopher preble, vice president for defense and foreign policies here at cato, cato institute. thank you all for being here today, and thanks also to our outstanding conference staff here at cay to who do so much behind the scenes to make our me vents such a great success. want to welcome those of you who are watching on c-span and also online at www.cato.org.

the budget control act passed by congress directs that on january 2, 2013, the obama administration must cut the defense budget by at least $55 billion and the same amount from domestic discretionary spending. the prospect of such reductions has led to assertions that they will damage the economy and increase unemployment. for example, earlier this year senator carl levin of michigan expressed his belief that the uncertainty created by the specter of sequestration was a real threat to the economy. meanwhile, some people who view excessive government spending as the source of the nation's economic distress and who, therefore, generally oppose using federal government spending to stimulate the economy nevertheless oppose cuts to the pentagon's budget. for example, in his speech before the republican national convention mitt romney asserted that trillion dollar cuts to our military will eliminate hundreds of thousands of jobs, and the gop platform claims, quote:

sequestration would accelerate the decline of our nation's defense industrial base resulting in the layoff of more than one million skilled workers. and later contends a half trillion dollars of cuts to the pentagon's budget would harm our national security and a struggling economy that can ill afford to lose 1.5 million defense-related jobs, unquote. others, however, claim that limiting pentagon spending would make resources available for more productive uses in the private sector and lower the burden on taxpayers. today's discussion will focus on two related questions; is military spending different from other forms of government expenditures, and could the impending mandatory cuts in military spending under sequestration actually benefit the economy? in august of this year, our first speaker, benjamin zycher, examined these questions in this

paper, "economic effects of reductions in defense outlays," hard copies are available in the foyer and online for those of you who are watching on c-span or on the internet. so let me introduce ben, our first speaker. he's a senior fellow at the pacific research institute, also a member of the advisory board of the quarterly journal regulation. formerly, he was a senior fellow at the manhattan institute for research, b a senior economist at the rand corporation and a member of the board of directors, vice president of research at the milliken institute, founding editor of the journal quarterly jobs and capital and at the president's council of economic advisers for the first two years of the reagan administration. he's taught in the martin v. smith school of business and economics, he holds a ph.d. in economics from the university of

california los angeles and a master's of public policy from uc berkeley. our second speaker today is stephen fuller. dr. fuller is a professor of public policy and regional development at george mason university. he's been there since 1994. he served as director of the ph.d. program in public policy from july '98 to june 2000 and, again, from july 2001 to july 2002. he also serves as director of the center for regional analysis. he, prior to that he taught at my undergraduate alma mater at george washington university for 25 year including nine as chairman of the department of urban planning planning and reae development and one as director of dock toral programs for the school of business and public management. professor fuller's research focuses on the changing structure of metropolitan-area economies and especially on the impacts of federal spending including two studies completed within the past year that consider the economic effects of

sequestration. in october 2011 dr. fuller focused on the impact that a reduction of $45 billion in dod procurement spending would have on the economy, and then earlier this year in july he published this study which considered the effects of the budget control act and sequestration on both defense and nondefense spending. and i'm very pleased to welcome him here at cato today. so let me begin by introducing benjamin zycher. please, join us here at the podium, and then we'll continue with dr. fuller. thank you very much. [applause] >> well, thanks, chris, i appreciate it, and thanks to cato for hosting this event, and thanks to all of you for your time and attention today. i want to discuss briefly here in summary three topics. first, the simple analytics of proposed reductions in defense outlays in the context of gdp

growth and the aggregate employment. and then sond, i want to offer a few brief comments on steve fuller's recent estimates of economic effects of cuts in defense spending estimates that have received, i think, a substantial amount of attention recently. and, steve, when i do that, i ask that you keep a straight face, unlike the festivities last night. [laughter] and then, third, i just want to offer a few summary data on defense outlays, on the relationship between defense outlays and gdp growth. what i will not discuss today is the appropriate size and composition of the defense budget. that would require a delineation of u.s. interests, vital important, desirable and marginal in the force structures and the budgets required to defend them. i'm simply not going to get into

that today. so let me begin with a very simple thought experiment. suppose that crime rates fall. this might be because of demographic shifts, because of changes in policing practices, because of higher incarceration rates. tell any story you want, but in the -- if we had an economy in which crime rates fell, you would expect there to be a decline in the demand for private security services, and that would represent a shift in demand and supply conditions that would be reflected in relative prices. and as a result of that relative price shift, we would observe a movement of resources across sectors including, including labor. that would be a classic example of structural unemployment as labor and the owners of other resources fine their most productive -- find their most productive uses in a world in which economic conditions have changed. no policymaker would bemoan that

increase in short-term unemployment caused by a decline in crime rates. why? because the reduction in crime yields indiana crease in national -- yields an increase in national wealth, and it's entirely appropriate for there to be some short-term unemployment, again, as labor and the owners of other resources find their most valuable uses in the, in a world of changed economic conditions. more generally, i think we can all agree that one central purpose of a market economy is the efficient, that is most productive use of scarce resources in a world in which demand and supply conditions change constantly in the face of innumerable factors. now, as an aside, that internal condition constant change in the economic environment is the fundamental reason that central planning cannot work, even apart from the adverse implications of central planning for individual freedom. we use market institutions to

allocate resources because doing so maximizes aggregate wealth. we don't use market institutions to allocate and reallocate resources in order to preserve jobs in any given industry. therefore, the structural unemployment that results from reductions in defense outlays is irrelevant analytically even if it is highly relevant politically. to the extent that reductions in defense outlays reflect an improvement in the international security environment, that improvement yields an increase in national wealth in exactly the same sense that a reduction in crime does the same. so while increased employment in a given economic sector or increased unemployment, rather, in a given economic sector is painful for those subjected to economic losses, it is not a loss for the economy as a whole because the the reallocation

increases the aggregate productivity. now, let's not forget that this reallocation process means automatically the resources not consumed in the provision of defense services are released for use in other sectors. among those resources is labor, so the employment losses dependent pop a reduction in defense -- upon a reduction in defense outlays automatically are coupled with gains elsewhere, usually with a time lag. and so, again, reduced unemployment as an effective defense cut spending is irrelevant analytically. ..

$164 billion downward change in direct and indirect sales, about $859 billion reduction in wages and salaries, about $27 billion in lost sales by subcontractors and other suppliers, a gdp loss of 86.5 billion for 2013, and a loss of more than 1 million full-time equivalent jobs. first, just in passing i think there's an obvious double counting problem in steve's projection that are really don't want to labor today.

but again, more fundamentally, reduced employment is not an economic cost properly defined because it's not the consumption of the real resources. furthermore, resources previously used for defense can be used for other government programs or return to the private sector, resulting in increased employment in those sectors. and as i read steve's paper, his analysis implicitly recognizes this. his model is of short-term effects. but there really is i think a problem empirically. is implicit multiplier effect about 1.9, is far bigger than those reported in the rest of the peer-reviewed literature, most of which report the findings of about 0.5-0.8. and i'm not going to get into this today, but this assumes that the concept of a government spending multiplier makes any sense at all, which i believe it does not. that is a debate for another

day. let's consider the bureau of economic analysis estimates of the defense contribution of gdp growth. for the 11 year period, the 12 year period rather, 2000-2011, the defense contributions effectively zero almost every quarter. why? well, because the defense share of gdp, even sort of the accounting model that bea uses, was 3% in the year 2000, rising to 4.7 or 4.8% in 2010 and 2011. that's simply too small for changes to have a large aggregate effects. a defense cut of $100 billion a year would have been two-thirds of 1% of gdp last year, in 2011. it's simply not plausible that a cut of that magnitude would have a large aggregate effect,

regardless of what one believes about the underlying economics under, regardless of what you believe about multiplier effects and all the rest. and that's why the simple correlation between quarterly% country and -- percent changes and outlays for again, the 12 year period, 2000-2011, is close to zero economically, and never differs from zero as a statistical significance in any event. let's look at this from a different angle. take the 20 period, 1981-2000, and let's divide a period into two sub period, 1981-1989, and 1990-2000. defense outlays grew in the first period, 81 through 89, at 4.3% annually. but fell in the second sub

period, 1990 through 2000, fell at 2.5% annually in the second period. nonetheless, average gdp growth rates in 1981-89, and 1990-2001 essentially identical, 3.4% and 3.3% annually, respectively. and moreover, again none of the correlations between defense and gdp for those periods is statistically significant. let me turn briefly to a related topic, the economic cost of federal spending. the official spending data that you find in the budget ignored the adverse economic effects imposed by the tax system. that is what economists call the excess burden of taxation. and in simple terms what that means is because taxes have distorting the facts in terms of the economic behavior, the private sector has to shrink by more than 1 dollar in order to

send a dollar to the beltway. and so the period, there's a large peer-reviewed literature on this, and which offers a range of estimates, a very conservative one is 35 cents. that for every dollar that the private sector since in tax revenue to the beltway, it has to shrink by an additional 35 cents. that really is quite a conservative estimate. and so what that means is that the defense cut of $100 billion per year would increase the private sector by at least $135 billion per year, assuming the 100 billion cut out of defense is not simply shifted to other federal programs. let me conclude with one last point. conservatives i think quite properly are highly dubious about the purported gdp and employment benefits of federal domestic spending as illustrated by the meager effects of the obama stimulus fiasco.

there's no particular reason to believe that defense spending is different. liberals naturally take the opposite view, domestic spending router is the path, natural enrichment while the purported economic effects of cuts to defense budget are not to be discussed. so we have i think very, very unfortunately in this election season a real inconsistency on this issue. with the same people arguing against massive domestic spending increases as a source of growth, and employment, while arguing against defense cuts because of the purportedly adverse effects on growth and employment. and vice versa. suffice it to say that that kind of inconsistency on both sides of the political divide, i think, is not very conducive to clear thinking. and with that let me finish, thank you very much indeed.

[applause] >> thank you all for inviting me to come and share some of my thoughts on sequestration in these real or imagined impacts that i've been measuring. the theoretical framework that we've just heard they stand up to test. we will have some discussion about that, but the objectives of what i've been working on over the last year, and two of the report identified have done a third one came out in september on the impacts on small businesses from sequestration. and i've also looked at nasa particularly. the objectives are different, and so what i have to say may or may not be in conflict with what is he one has outlined. objectives were to take an

economy in which defense spending and nondefense spending plays a role, create jobs, pay salaries and wages, money, the income that is spent within the economy. test whether not that spending could have been more productive in the private sector versus the public sector, i think that's a different part, a different analysis. what's proposed by sequestration is that we're going to take some federal spending out of the economy, roughly 115, $116 billion next year. and what i attempted to do was to put some price tag on that. that isn't costless. unemployment does have a cost. i think we have learned that lesson over the last couple of years, has a number of cost besides unemployment insurance and lost skills, lost output.

so when we take money out of the economy, it has a cost. a different analysis, if we put the money out of it somewhere else, we get all that back. i would point out the money we're taking out is all borrowed. doesn't reduce taxes. just reduces deficit. by borrowing less, theoretically, we have more money available for the private sector. that's a good thing. if they needed it. if there was a shortage of liquidity. ben bernanke has been working on that. that's a different study, you. so what i've reported, and which has been presented here to some degree is a way to calibrate what the costs of reduce federal spending are. and it's not complete. so the more recent study which looked at federal spending that

affects payroll, as well as procurement, not just military equipment as ben cited in my earlier study, but across all discretionary categories, which cost $215 billion in lost gdp activity. that's two-thirds of what's projected to grow. the economy grows at current projections somewhere around 1.9, 2% next year. this would represent, just to give it a reference point, two-thirds of gdp. about $110 billion in labor income is associated, at $40 billion in federal payroll. so to understand what is tied to that spending the analysis that i undertook for some jobs to that, about to put 1 million jobs across all sectors of the

economy. right off the top they would be about 277,000 federal jobs. nobody has addressed what the disruption to the private sector would be from the loss of those federal jobs. can't assume those 277,000 federal workers don't do something. i guess maybe you could assume that, but if you're flying from one airport to another, some of those workers are in the tower. meat inspection, research at nih, department of education, they grants wouldn't be cut back. they're exempt but he would administer them? national parks would be closed, not just for a day. we get inconvenience here periodically when they close something for a couple of days, tourists do. for a year, cutbacks don't start

on the second. that's official when they start but most agencies won't do this on the second. wait and see if it's for real. assuming if it is. i can't imagine it happening, but if it is for real. we are already a quarter into the fiscal year by that time. we may be two quarters before you start cutting back so the cuts are much deeper because of the period, achieve a years reduction is now six months. they are deeper and sharper. this has some impact on the economy. you and i are affected. passports continue to get a passport? may take longer. port inspections, exports and imports. these have costs. i'm not arguing that you might not be able to do it more effectively in a different manner. again, that's another story. i suggest that the collateral effects are even more important than the ones i've measured.

these to have an impact on small businesses. small businesses disproportionately provide the vendor and supplier services, the subcontractor services and the induce, the services that are supported, retail, other services that are provided by the labor income that would be reduced. can't just move it into the private sector because it was a real money to begin with the private sector can generated in 2013. by 2021, quite likely wouldn't want to argue the economy wouldn't be better off 10 years, but next year will be better off. small businesses account for 58% of the suppliers and vendors, subcontractors and businesses that are supported by labor

income. 58%. many of these, i haven't studied him, i don't have and the total information, but i'm told that if they lose a contract, 10, 15, 20% of the business, they have to shut down. we've only measured once lost if you take the federal money a way but as a consequence. most small businesses aren't publicly traded. most small businesses don't have a big backlog. they don't have geographic distribution. they are specialized. they don't have the funds to offset losses. they fire people really quickly. users of specialized skills and ultimately a number of businesses. so there are secondary effects on the side of small business impacts. so i think the question here, spend more time but i don't have too much time, i think the real question is, if we are concerned about reducing the federal budget, which i think it's hard

to find someone who shouldn't be concerned about that, we are all concerned about a more efficient in the use of federal funds, our tax dollars. the question then should be, how do we do this to minimize these short-term effects so that we can get the long-term benefits? how do we do it with the least disruption to the business sector, the private sector, from the limitation or, of necessary jobs. some regulation helps. i think that inspection is a good thing. maybe not all of it but certainly most of it. how do we reduce, knowing what the negative effects are in some order of magnitude, how do we minimize these? how do we be more strategic in this activity? the workers won't be reemployed right away. there are some pretty smart

workers. they will conclude at some point as the economy expands. it's a very weak economy to be doing this kind of spending shifts, because it doesn't shift smoothly from public sector to private sector, and it doesn't produce tax reductions which give you more disposable income. so i think the discussion, the theoretical discussion versus a more apply discussion may leave some room for discussion ourselves. inc. you. [applause] >> thank you both. let me now introduce her third speaker. i said how i was very pleased to welcome doctor for to cater the first time officially. i'm pleased to welcome back steve moore. is a member of the editorial board "wall street journal," seen economic strategies been there since may 2005. steeds blitz is time to washington and new york, focus on economic issues, taxes, budget, monetary policy. he was the founder and president of the club for growth, also served as president of an opposition call the free enterprise fund.

but he work with the joint economic committee of congress, the heritage foundation but is also a senior economics fellow here at the cato institute where he published dozens a government report card card, right? which we still publish to this day. he was a consultant -- popular to some i should say. popular to those who scored well. and a research director to president reagan's commission on privatization. he graduated from university of illinois and holds a masters degree from george mason. [applause] >> at afternoon. thank you so much for inviting me back to cato. professor, it's terrific to be with you. i'm a george mason economics graduate. ben, i just love your study. i think it's a fantastic piece of work and it needs to be said, so thank you for writing that and doing the analysis. i agree with virtually the entire study, and i think it is spot on.

you said almost all the things i wanted to say so let me just address a couple of things that, just as points of emphasis. byway, to start this i wanted to say that i was privileged for many years in the 1990s through the mid-to thousands, a couple times a year have lunch or dinner with milton friedman up in san francisco. and it was just an awesome experience. myself in milton friedman, and rose would be there, and oftentimes one or two others would go and we would just talk about the economy. and i got to learn economics from the master. i will never forget one of my last conversations with milton. i said, what are the three things we can do over the next 20, 50 years to increase the rate of economic growth in this country? and he said number one, school choice which is something he pursued very aggressively. number two, free trade. on the third thing he said is

cut government spending. and i said milton, by how much? i'll never forget, he smiled and he said by as much as possible. and i think that's an interesting insight. i think of milton friedman were alive today he would agree with just about everything ben has said in a study. one of the things i find interesting is that the argument against doing these cuts, and facing this fiscal cliff, is that this reduction in government spending will cause all sorts of economic disruption and certainly a lot of the points that professor fuller made are correct, but i think the broader point is that you know, this is kind of generally a keynesian idea. bigamist been posting the economy and that the reduction in government spending as ben put, the statement they come for the same reason except that as i read history and i look at the evidence on this, i think that is so strange that keynesian economics it has never worked or to charge any evidence that

these ideas were. they did work very well in 1930s. they didn't work very well in the 1970s. they didn't work especially well for president bush when he tried to do keynesians seem as in 2008. quite obviously it didn't work when i have the biggest keynesian experiment may be in history of this country, which was in 2009 where the unemployment rate actually went up. it's interesting, ben, i look at some of studies of this, why didn't the same as were? why did the unemployment rate go up? the evidence is pretty clear, just as a lot of the previous studies have suggested would happen, but just that for every dollar of increased government spending, private sector spending went down. that's because milton friedman had my. is no such thing as a free lunch. if the government takes about out of the economy it has to come from somewhere. there's no tooth fairy providing money. professor fuller is exactly right, that the most, immediately impactful way to pay for this would be, for spending

would be to increase taxes. that's not what suggested here, that the spending is being mostly financed as you said by borrowing. but i'm not quite as salvatore as you're about the impacts of borrowing. i think somebody has to buy the bonds. so every dollar that you borrow, that means somebody out there has today, borrow the ball and. as i see it every dollar of spending is took him even if it's not directly taxed i think it's taking 1 dollar out of the economy. that's the theory around us. let's look at some of the evidence. one of the things i looked at that you talked about, ben, is exactly what happened in the '80s and '90s. let me just focus on the 90 because you write. remember, by my measurements we cut about $100 billion in real terms out of defense budget after the berlin wall came down. so this was a significant reduction in defense spending,

and about as big as they are talking about right now, and perhaps even bigger. and iron emir at the time by the way, there were all sorts of apocalyptic claims about what would happen if we did these cuts because you know, transport, especially in states like virginia that are heavily impacted by defense spending, and your state of california i think those two state probably have the biggest, our impacted most it and asked the california i think did go through a recession in early 1990 and people blame that on the defense cutbacks. the problem with that is virginia actually took about proportionally the same amount of cuts and we didn't see a recession in virginia. virginia found a way to grow in other areas, replace those defense contractors with high technology and so when. and so i think that's a really good example. i'm so glad you bring that up in your study. a couple of other points just for conversation. we had another cut in spending that we did. it was similar to this fiscal

cliff, not at the same magnitude, back and i think 86, 87 when we had the gramm-rudman, the first question. and i forget, you probably know the numbers, i forget exact how much it was but i think the average got back in these programs is somewhere in the magnitude of two or 3%. that's not as big as we're talking about now but it's interesting to see what happened about in terms of how federal agencies responded. and the way they responded, guess what, they found that they could save money. we didn't see a reduction for the most part in vital services. i completely agree with you with the kind of programs you mentioned, things like food inspection. that's a critical function of government, but what we found that is these agencies were able, they would wind and screens but they were able to find ways to cut inefficiencies out of the budget, and were able to save money without any kind of recession or an impact. and may i add that this idea that these federal agencies can't take a cut of four or five

or 6%, i think is disproven by what's happened in the private sector. one of the things that happen in this recession is that businesses did take, look at a lot of small businesses and large businesses as well, they went through this recession. the way they survived, the businesses that could survive, is a found ways to reduce their budgets and spending by 5%, 10%, sometimes 20% and they came out of the stronger. if you look at the balance sheets of companies now they are very healthy and have reduced a lot of the debt. the point i'm making is if private sector congress can do that, then certainly the government can do it. it would be one thing to say g. come it's going to be hard to take a 5% cut of 10% cut. it depends how long this request goes on. we're not talking about a one year sequester. we are talking of potentially a series of years of this where the cuts get deeper every year. i just want to remind people that these federal agencies,

especially the agencies on the domestic side of the equation, they just lived through massive increases in the budgets. if you look at some of the numbers the budget committee has come out with they have shown a lot of these domestic agencies, in fact the average increase in spending on these agencies because of the first two-year budgets under obama and the big stimulus bill, there budget increased by 40, 50, in some cases over 60%. so can they take a 10% cutback? my answer to that is hell yes. i think they can. the last one want to make is something that you're talking about, professor. i agree with you, there's a lot better ways to do this that he sequester. it is kind of a mindless mache machete. the problem is they won't do any of the other approaches. i think you and i could sit down and we could come up with something with a much more efficient way to make the cuts that need to be made, but you saw, just taking an example of what happened last week when during the presidential debate,

mitt romney brought up what may be we can cut corporation for public broadcasting spin. look what's happened. last week, i live in virginia so i've seen these ads. is going to cut big bird and al mullah have a place to live. that was one little tiny program in the budget which probably isn't -- elmo. i think we can live without the subsidies. think that if he tried to come up with, we done this at cato. we come up with a laundry list of programs that can be a limited. absolutely that would be a much more efficient thing to do. more important i think we all agreed it would be much more efficient to cut medicare and social security in these big and other programs rather than some of these smaller programs in the budget but they won't do it. i think one of the values, i think the republicans have a strategic mistake politically in saying we don't want to do this defensive sequester. in my opinion the only way you can drag democrats who don't want to cut the budget, there's not a lot of republicans who want to cut the budget either

but the only way you can get into the table is you've got to do this quest to cuts. you've got to do them year after year until finally democrats a we can't take anymore, we will have to make sure that warren buffett doesn't get medicare, or we will raise the retirement age, the things that i'll need to be done. so i think i would make the case one of the benefits of this issue keeps squeezing these programs and finally the politicians will cry uncle. so i'm very positive, one last quick point, made we can talk about this during the discussion, i'm extremely concerned, i think it's a disaster if we do a tax increase next year. i think that will very easily cause a double dip recession but i think the economy can't handle the increase in the personal income tax rates and the capitol gains rates. we are talking about a severely damaging effect on the supply of goods and services on investment of every time the economy is so fragile. so that's where we should be aiming. we should make sure the tax sequester doesn't happen, but i

am at all at least for the first year in favor of the sequester on the spending side. and thanks again for writing this paper. [applause] >> thank you, steve. i don't usually do this but since my three speakers were so efficient, i will exercise the moderator's privilege and ask a question myself. i think picking up on steve's last point, steve morse last point. in your study, doctor four, the one that looks at the economic impact, the one from july that looks at the economic impact of both beauty and non-dod spending cuts, you've found a different effect, in other words, your assessment was that the cuts in nondefense spending would have a more harmful effect in terms of job losses and economic activity and what the defense spending, which is different from what others have concluded.

i wonder if you'd come on -- comment on that lived but also steve moore's point, which is that what would be the economic effects of tax increases to cover the debt, in lou of sequestration. have you looked at that comedy have some sense of that, or i do ben or steve want to weigh in on that as well? >> and how long do i have? >> not long. with many people have been very patient. >> the big difference between the proposed cutbacks in dod and non-dod agencies is that non-dod agencies are largely labor driven, payroll driven. they don't have big procurement budgets. and so, the almost equal reduction, a little grated but let's call them equal from non-dod agencies largely take a toll on labor income, which goes

into the economy differently than, and it would cost us 230,000 federal jobs right off the top, and about $30 billion in payroll spending. that has a much different impact on the economy. the loss of that, whether it just be for the first year or temporary, short-term loss of that would have a much bigger impact than the impact on dod, which is only about 48,000, billion payroll jobs at stake here, and the rest would be contractors. and contractors spend much of early. they are not all payroll. the money runs through the economy in a different fashion. the total impacts are not too different. it's the timing of it. i would want to suggest that dod has already taken a pretty big cat, when we think about slash and opportunities to cut for the. they already have begun implementing $487 billion, ten-year spending reduction.

so presumably -- [inaudible] >> correct. but presuming they are making some reductions and the nondefense agencies haven't, most outside of homeland security and maybe another one, haven't had much in the way of spending increases in their 11, 12 or 13 budgets. they are working down based on inflation. so their budgets are already tight as we begin to squeeze them for the. so the opportunities to cut back i think are a little more difficult, and to present as a whole lot easier than a 9.1%. in any event, i think would be a very bad policy move to increase taxes to try to pay our way out of this problem. i think some taxes, service some entitlements are going to have to be adjusted to change the revenue flow slightly, and hopefully grow the economy stronger, and reduce some spending where there's fat and

whether our services that can be better provided in the private sector, like that analysis of that analysis beyond the ability of congress to figure out in the time that's available. that clearly would produce in my judgment a better answer. taxes, fiscal cliff almost universally, i haven't heard anybody say that it wouldn't drive the economy into a recession next year. and i think that is to be avoided. it's a very fragile economy at this point. >> one quick thing that i just forgot to say in my remarks i think is really important. look, if you read our "wall street journal" "wall street journal" editorials you know we are against the sequester cuts, and that's not because we think the defense spending is efficient for the economy. it's because we are concerned about the national security implications of these cuts. and i think the important distinction, that makes this in the study. if we need to spend the money to keep us safe, then absolutely we should spend the money.

what i object to is the idea that spending the money is going to be good for the economy. well, this is a dangerous world. professor fuller is exactly right. we have made some very significant cuts in defense, and there's no getting around it. these would cause pretty big reductions in troop levels and our military equipment and our strategies in terms of with the data with the homeland security, if we make the cuts. and so i think, i guess the point i'm making is we should make this decision based on national security, not based on some kind of keynesian stimulus to the economy. >> just to be clear, the effects of sequestration would take the budget and to just about to turn to 2007. so that's where would be under sequestration. do you want to add anything to this? >> i would actually. one point, we have a i think 2500 m1 tanks in the inventory,

something on that order. we are still producing them. why? because they are produced in ohio, and ohio is a swing state with what, 19 or 13 electoral college votes? i forget that it is not because we're worried about the russian army pouring through the gap anymore. and so i think that steve is really quite right when he says i'm right -- [laughter] the issue is what our vital interests, what is the core structure needed and what is the cost of the force structure? not whether or not there's going to be increased short-term unemployed in virginia or ohio or anywhere else. now, the second point, steve i think unintentionally has kind of slipped into a washington monument game, sort of problem in which he talks about the passport office and anti---

>> jihad to be specific about what steve you are talking about. >> i didn't quite hear what he said. >> which steve? >> sorry, steve fuller. you guys do look so much alike spent pay attention, dr. fuller, he is talking about you. >> and the argument that somehow there are not things, assumes away the privatization issue. that's a debate for another day. the argument implicitly that there are not things we would cut first that of lower marginal value and the passport office and the rest, the drug war, the militarization of federal law enforcement, why does the food and drug administration have a swat team? you know, i've not gotten a straight answer for that question. i've asked many times. and the destructiveness of the entitlement programs.

people, just to give one example, people argue that with a small tweak to the indexing formula under social security we could make it solvent for the next 70 or 80 years. true enough. that doesn't do anything about the economic damage caused by the so ecurity system in terms of reducing people to save less which has result of reducing the capital stock and wages. i don't want to get into all of that, but steve -- again, i think steve fuller's is slipping without thinking about it too carefully, as i interpret his comments into the washington monument game, which is a very dangerous game to play intellectual. and then third, let me return, steve fuller, again to my prime example. if crime rates fall and there's reduction in the size of the market for private security services, and, therefore, there is some short-term unemployment among those who otherwise would have provided private security

services, tell us why that is a problem. please. >> all right. you have a chance to get in response to another question which is another washington game we play. thank you, gentlemen. so when i have time for questions. please wait for the microphone, for the benefit of those are watching online and on c-span. please identify yourself and your affiliation, and one more thing. the jeopardy rule applies here at the cato institute. that means police of racial question in the form of a question. no speeches, please. who was first? right here. >> dan freeman from the projects and government oversight. the question is for dr. fuller or anyone on the panel really, we mentioned that if the pentagon sequester doesn't occur, then taxpayers will basically be financing that additional pentagon spending. i'm curious if you, dr. fuller,

or anyone on the panel, has analyzed the job loss impact, the taxes we will occur as taxers have to eventually pay that back with interest? >> i have not analyze that, no. spin would either of you care to speculate on that? >> larry at boston university a lot of work on the issue. what our, what are the effects of exponentially increasing government debt, and i would not confuse debt with interest payments. those are two sides of the same coin. the present value, i would be careful about that. but i don't remember larry's most recent estimates of this. i would have to go back and look, but if you just go to the boston university website and, or even googled his name, lawrence, you'll find a lot of work on that very topic. >> the way we put it, put in her

editorial is spinning is taxes, right? i think they kind of point of the question is okay, so they say they will not raise taxes now when they do the spending, that means they will do it later. and, of course, we have seen that now, a perfect example is a stimulus steel. with eight and $30 billion stimulus bill that didn't create jobs. all without for over the last four years was all this accumulation of debt. and now we hear in the debates we have to raise taxes to pay for all this debt. it's sort of pay me now or pay me later approach. i think it's a very valid point that at some point you know, spending always has to be paid for, and one of the ways we pay for it is taxes. i think there's a very, there's a lot of talk about fairness out there. how is it fair that people, are not even born yet, how to pay for a lot of things we are doing now. spend you don't believe, steve, to some substantial degree where not just going to go away?

the average which are you just government bonds that is what, five and half years i think. most of which is not indexed. and the chinese hold lots of it. they don't vote, at least they may make campaign contributions. i don't want to get into that. so it strikes me, to my simpleminded way of thinking that the incentive to inflate away some part of the debt is enormous. and i cannot envision a world 10 years from now in which the inflation rate is not substantially higher than it is now. >> in the back. >> i'm peter, a cato donated. i've known steve for about 15 years. could you hear me? >> go ahead. >> i've known steve moore for more than 15 years, consider you

a personal thing. it's too late to get out of the stock market. you scare the hell out of me. >> peter didn't have a question to ask. next, right there. >> at least he kept it short. >> i'm michael, a reporter with aviation week. i've got a question for all the panelists. forget your potential political favoritism of the argument, but how does the idea of allocating 4% of gdp for defense spending, how does that play out in an economic sense? and is there an example somewhere else in the economy with that, that's basically done? at how has that affected the economy? >> percent of gdp is a measure of what we can afford. it's not a measure of what we need. so once again, we cannot talk

sensibly about the required size and composition of defense budget without doing some kind of serious analysis of u.s. vital interests. i have not done that. i mean a denser market writing on that, but that is what is necessary. the point of the paper is that the public discussion is really not focused on that much more relevant question. what is really focused on is a relevant question which what are the short term employment and gdp effects of changes in defense budget. and my application, which is the wrong question. the question is where were resources used most productively in the economy, and what is the path about to take as there? and percent of gdp really is neither here nor there except as a measure of what we can afford. >> the 1990s, we keep going

back to this, but they really are a very powerful counterexample. i mean, ben can you mention some of the statistics about the reduction in spending of the '90s. you mentioned what happened with respect to the defense budget, but the domestic budget shrunk as well in the 1990s. if you look at when bill clinton, federal spending was, trying to remember, about 22% of gdp, eight years later when he left office we were a little over 18%. that's a big cat. that's a big cut in the cost of government. four percentage points. and that was the biggest boom. we ever saw in this country. the economy never did better than it did in the 1990s. so i just don't see any evidence that these cutbacks of spinney, i agree with train for that doing it really rapidly overnight is going to cause some dislocation. no question about it.

by do think the medium and long-term effects of this will be quite positive. >> dr. fuller, to want to add anything to that? >> i agree with steve, and i think ben is welcome with respect to what the long-term benefits are. the issues that have raised, and it's beyond the washington monument of fact, is that cutting federal agencies uniformly which is almost what sequester requires doesn't allow federal agencies to, decide they can just do 2% this year or 3% or 10% a year later. they have to go in there and cut severely. and dod has already started that process, and i think their inability to maintain their levels of readiness as has required of them, they claim at least, i can't judge this, are

already close at hand. they don't need any more tanks but they need, and maybe not as many as 35, but they need more drones. there is a change underway, and when i testified before the house armed services committee, they said, i don't know this to be true, that they never worried very much about the economic impacts of cutbacks. what they were worried about was the ability to complete the mission of defense. and defense readiness. and they were interested, democrats and republicans vote said we can have these impacts but they couldn't agree of course how they're going to avoid him. and that is the issue today. >> your question, we've done a fair amount of work on the 4% question trying to catch what what that would be. i'm not the only one. others around town agenda. i now see that the romney camp is claiming that these matters, the $2 trillion figure is made

up. that's fine. you can come up, please tell us what you think the initial cost is. because presumably someone there has done the math. not that complicated. one of the point on spending and defense, it is true the total military spending, inflation adjusted dollars has come down very slightly over the last few years. most of that attributed to the end of the wars in iraq and afghanistan, or the drawdown in afghanistan which is pending. most americans think that's a good thing. the base pentagon budget, in inflation-adjusted dollars, remains very close to its historic high. in spite of the supposed speeders you mean relative to inflation? >> yeah, base budget is basically flat over the last few years. and under sequestration, as already pointed out you can go back about 2007 levels which is again historically high point, but under current projection, the base budget actually holds

constant and decreases very slightly to the rate of inflation. yes, sir. go ahead, and then here. go ahead. >> robert schroeder, president of international investor, and i'd like to small disagree with benjamin zycher. i think i heard you say defense spending or any other line item could be measured as we could afford when looked at as a percent of gdp. i think that is the wrong benchmark for us to use. so very briefly let me just say, no private sector organization in the world would ever use the number of widgets produced in the course of your, to compare any of its line items for spending. rather, profitability is the key. benchmark, that they've always used. they have to use it. we should do more of the same, instead of a soviet style

outlook as far as government spending is concerned, we should be concerned with what we really have left at the end of the day. we know there's deficits right now but that is all the more reason why both sides of the equation have to be looked at. spending side and revenue side. so my question is, and i think mr. fuller might shed some light on this, when the lookup order to be at the end, when we look at the line items of our budget and we see, is there a difference between spending the money on some of the military hardware versus spending the money on other sectors of the economy? not just in terms of the multiplier effect for jobs and the velocity of money and the economy over the immediate years, but long-term productivity gains, research and development, what a train would produce, in terms of moving freight. >> okay. spent just one quick comment.

i love what you just said, and i agree with a so much with it. look, one of the problems with government, because there is no profit in government by definition is we tend to measure, you know, our commitment to these things by how much we spend. the perfect example, i mean, is, we did this with the military budget but my favorite example that we talk a lot about when i was at cato is education. i mean, the president keeps and we're going to -- we major education by how much we spend, not by test scores and other things. so i think that's a very a deficiency of government. you're quite right, we should change the metrics by which we measure these things. because it would be better if we spent less on education and get better test scores. >> anyone else? okay, here.

>> [inaudible] >> my question is this, dr. fuller and anybody else who wants to respond, over the years the economic literature i've read suggests that when it comes to job creation, spending on what we might term the military industrial professional services complex is, to be accurate, it's at least efficiently to create jobs. almost anything would be better, digging ditches, solar panels, whatever you want. so if that's true, then could we not actually be pleased that a possible sequestration would, in fact, be cutting money from the least efficient job producing aspect of government? >> thank you.

>> he directed it to dr. fuller first. let's go to dr. fuller. >> i don't think i will argue with you, that money spent in government and is less efficient than in the private sector. i think the literature pretty well established that. so if i were examining the impacts of sequestration in terms of job creation, is this a good way to create jobs, i might produce a different outcome than what i reported, which is if you take $51 billion out of dod and 57, or whatever the numbers are, out of non-dod, isn't going to have an impact on employment? would increase unemployment? is there some aspect, some economic consequence that we should be aware of in making that decision? and if it's severe, and it is. i'm willing, i'm not the only

one that comes up with these kinds of numbers, that there is a consequence. if you buy fewer airplanes, will there be fewer airplanes manufacturing jobs? yes. what will those people do? they will do something other than manufacture airplanes. and is that good? i'm not sure. does it cost us something? yes. unappointed does have a cost. this would add probably a point, a point and have on unemployment rate. is that good? i can't imagine anyone would argue it's a good thing. not in the short term. and so i think you have to look at this and then decide, in those terms and and decide how do we minimize those kinds of consequences and achieve less federal spending and more growth in the private sector. i'd love to have that discussion. >> go ahead. >> the premise underlying your question, forgiving, is precisely wrong.

jobs are a cost of government spending, not a benefit. it's as counterintuitive as that may seem. why? supposed president obama would say my energy policies would increase the use of high quality steel. that would be great for the steel producers. and for the steelworkers. but for the economy as a whole that the cause because the resources used to produce the steel would no longer be available for other uses. that's a classic definition of opportunity costs. similarly, government spending that consumes labor, or that labor consume the right government spending programs is a cost. that labor can no longer be used in other sectors. government spending programs are, the employment created by government spending programs has to come out of other economic sectors, whether the government sector or private sector and, therefore, is an adverse effect, a cause, not a benefit in the aggregate of the government

spending program. again, as counterintuitive as that may seem. >> government doesn't create jobs, it moves jobs. next. >> andrew jensen. the way i see it with regard to sequestration or the budget deficit in general, you have two options. one, do nothing, thus let the sequestration take effect -- >> can you speak of just a little just a little bit? >> the economy will shrink. some negative impact. the other is you have to do something, and that something will involve some adjustment of tax policy or spending policy. however, meager it is, if we do something, it will increase the

size of the bubble, or would risk increasing the size of the bubble and then it only furthers our dependence on the government's intervention, whereas it could be the source of the problem. but my question is, can you please respond to that? i think it's clear to me to do nothing would be better, let this happen, but the dust settle and move on rather than risk increasing the size of the bubble. >> thank you for your question, or maybe to raise -- rephrase it, or if doing nothing isn't the right solution, what is the grand bargain, what is the grand illusion that was tried and failed numerous times just within the last few years? >> of course the reason we have this whole discussion is, you know, that talks blew up. i think that's because the democrats would agree to anything that didn't have a major tax increase that the republicans were right under that circumstance to walk away from the table.

i do actually, i do think that, joe biden had a point lastly, one of the few pointy hat, which was it is true, the republicans agree to this. they agreed this was the deal, if we can't reach an agreement we're going to do these cuts. the kind of going back on announcing we didn't mean defense cuts. everybody knew what the default position was if we didn't come to an agreement. and i guess the point i was trying to make, in my remarks was, i think it's important to do this a question because i think it makes it more likely, you know, and is going to cause pain and suffering, no question about it but i do think it makes it more likely that we get some real progress on these much bigger issues about these runaway entitlements, the big boulders of the budget that needs fixing. >> i would argue the world isn't so simple that there only two choices. you've offered only two choices. i think, i've been arguing that

there's a third, fourth, fifth, sixth. i do think that the sequestered, sequestration was the poison pill, and it's slowly getting peoples attention. it's taken a long time, and it would be awful if that's what it takes in order get congress in order to come to terms and work out a proper solution to tax policy and to spending policy. but it may be, i think there's other choices, and that's what i would argue for. >> i agree pretty largely with steve on this. the sequestered, however blunt a tool it is, as the supreme virtue of forcing, not congress so much, but the electorate to pick a choice. and i think whoever wins the election in three weeks will have a mandate, i would assume, or can claim a mandate at least plausibly to move forward with something other tn a sequestered. i think the sequestered is

really quite a useful tool for forcing, forcing both electric and congress to make decisions. >> can i ask steve a question, if i may? i would like both of you, if you feel up to it, to address this issue, i've heard a lot of arguments made by some people saying that the defense department is a major driver of technology and fat the defense department is what gave us the internet and is what's given a cell phones and all of these technologists. and i don't know enough about it, i'm not an expert at this but i wonder if maybe you, ben, first could discuss that? i mean, is a pro-investment to spend money on the military, or maybe the other argument is if we're not wasting all this money on things we don't have to spend on military systems it might enhance technology. but what is your view on that? >> my view is sort of a to answers, both which are brief. a, but the -- broadly speaking

is to defend capital against foreign aggressors, for destruction both fiscal and human, et cetera. so to extend the defense budget is too small then you might get too little investment. .. >> i don't see any reasons to believe that the market invests in technological advance in an

inefficiently small, to an inefficiently small degree. so i've never really bought the argument that we have to have a large defense establishment in order to drive an amount of technological investment. i just don't buy it. >> there's been a lot of attention given to innovation that is underwritten or supported by federal spending that could be lost whether it's the national science foundation or nih or nist or darpa that they can take risks that the private sector can't take. could we get into another way? we used to when at&t ran the bell labs as a monopoly. we used to get basic research. the r&d that is being funded in the private sector today is more about the d and less about the r, and the research isn't basic to the extent it was and has to

be tied to product development. so i think there's some public interest in that. what i would be most concerned about following up on ben's comment is that we're putting this up to a vote in three weeks, less than three -- a little more than three weeks, and the voters don't know what the issue is. they're not voting on sequestration. they don't understand the role of government. they may say, well, it's too big, i want my taxes lower, but they don't understand what they may be giving up. and so whether it's the specters or the easy things identify, most of us can't identify what benefits we get from the federal government. i would assure you if you take 275 federal workers, 275,000 out of two million out of the system really quickly -- and, in fact, that number would have to be

double that if you wait until april 1st -- you're going to notice it. and it's too late to vote for that. so i can't think that we can leave this up to a vote. >> i, also, i was going to pick up on that point too because this is where i disagree with you a little bit. i don't think both candidates have expressed opposition to sequestration, but they have not clearly articulated what their alternative is. and that's a problem. [laughter] >> right. >> so i, i do disagree with you a little bit. >> you know, let me address that. >> wait a minute -- >> we've had this whole discussion on something that's not going to happen. i mean, i would bet anyone four to one odds that they're going to turn off the she questionser -- sequester, it's not going to happen. >> by just turning it off? >> well, the first thing they're going to do is turn it off. so in the lame duck session -- [inaudible conversations] >> the entire debt ceiling thing was a complete charade. >> yes. >> and all of the -- no, hold

on -- >> no, it is. >> hold on a second. all of the people who held the line on the debt ceiling, again, they confronted speaker boehner with that. they were holding the line on that. >> right. >> they're all going to say, never mind, what we were holding the line on in the summer of 2011 suddenly doesn't matter anymore? >> not all of them, but enough of them will, i think. i don't know, do east of you -- >> once again i find myself in the usual quite familiar position of disagreeing with everybody about everything. [laughter] first of all, yes, yes, neither romney nor obama has specified a specific problem about how to proceed on the budget. nonetheless, it's not difficult to predict that an obama second term would emphasize increased domestic spending and less defense spending to some kind of loose degree with romney emphasizing the opposite. second, the argument that people don't know is an extremely weak argument, frankly.

people -- you don't, the mass of voters doesn't need to understand this. it is only the marinnal voters who need to -- marginal voters who need to understand. and i have an old paper on why the rational voter ignorance model is wrong, and is i'm not going to summarize that today, but in any event, the argument that people are dumb, i think, is not very predictive about actual voting behavior. people understand their interests, and i think vote accordingly. >> it's 1:15, steve, i don't know if you -- >> i'm good. >> you're good? okay. other questions. here in the front? is -- >> i'm jean with peace action, and first i would like to thank dr. preble for correcting the error that i can see, believe that you made, mr. moore, by saying that the pentagon budget has dramatically or is being dramatically decreased, and, um, i think that dr. preble is

absolutely correct that the decrease in the base budget is very small and is, actually, projected to grow with inflation in adjusted terms. so i think that's a really important point to have included in this discussion. also professor zycher mentioned that he hasn't done, that an analysis of specific defense cuts is a separate thing that needs to be done, and i would also like to point out that dr. preble has done an outstanding study of that as a cato document, and i would encourage people to take a look at that because it's really quite excellent. my question -- >> question. quickly. [laughter] >> my question is, um, earlier someone mentioned the production of tanks in ohio. and the political implication being the reason those tanks are being made is because of the election there. um, a number of people have

identified the fact that the large, um, defense contractors like boeing and lockheed and so forth, they have systematically distributed their subcontractors throughout the country. >> right. >> and, um, if we accept dr. preble's analysis of the extent to which defense cuts can be made safely without affecting our security, what is the -- how can we address the power of these huge corporations and the way in which they have distributed their subcontractors? >> go ahead, ben. >> yeah. i, um, don't agree with your premise. i have another paper, actually, on why a certain amount of defense pork is sufficient. and the basic argument is to the extent that defense services are what economists call a collective good, they accrue to even. the benefits from defense

spending, this is a very simple argument that they accrue to everyone, and people who don't pay their taxes can't be excluded from consuming them. that's what a collective good means. well, the standard textbook argument for government or one of them is that the market will underprovide collective goods and, therefore, we need government to step in and provide the acceptable amount of collective goods. the problem is if you think that problem through carefully which you'll realize that government also under a majority sort of decision process also has incentives to provide too few collective goods. so by positioning defense bases and manufacturing facilities in many every congressional district you can, that's one way of actually correcting for what ought to be called a government failure or to get the provision of collective goods up to the efficient levels. i think the argument that you're making that there's some sort of almost a conspiracy, you didn't say that, but this effort on the part of corporations to do evil

by getting to spend too much on defense is really, i think, not right. >> other questions? in the back. need to keep a microphone in back. go ahead. >> hi, ethan rosenkranz with the commonwealth institute. dr. fuller, if a short-term decrease in government spending costs jobs and impacts economic growth, would you advocate for a short-term increase in government spending across the board to increase jobs and economic growth? >> you asked me about "advocated." probably not, but would it? i think you can strategically place federal spending in ways that it would generate a quick increase in employment. but still, you know, we have a surplus of workers, and we have a surplus of capital. the kind of analyses we're talking about are assuming that there's a shortage somewhere

right now. and so that we either create more work for, you know, people who pick up paper along the roadside, not very good jobs, but we could fill those jobs with people who were unemployed if we wanted to. just to put 'em back to work. maybe pay them more cleaning up than what they're getting on unemployment insurance. i'm not sure since that pays pretty well these days. >> well, then why was the stimulus such an abject failure? >> well, i'd argue that if you track the performance of the economy in the six quarters following the beginning of the recovery that it actually performed better than it would have had that stimulus money not been in circulation. i don't think it was -- i think the economy would have been in much worse shape today than had there not been some stimulus.

a at the time the stimulus was designed, i don't think it was implemented or designed very well, but at the time it was designed it was thought that the recession was a 2.8% recession, it turns out it was a be.5 -- 3.5. it wasn't big enough, you could argue. you can say it was a failure, that's what you get away with in the presidential, vice presidential debates. but, you know, the fact checkers need to be at hand here too. >> other questions. back there. >> hi, my name's mike jarrett with the bea, and i just have a quick question for the panelists. let's say the budget cuts does take place. what would -- in regards to military strength numbers, what are your estimates on the percentage decrease? >> what are the estimates of what? >> what would be the effect, what would be the size of cuts on the military in terms of actual fighting effectiveness.

>> the strength numbers, right. troops. >> i'm not qualified -- >> i mean, 10%'s a good round figure. the personnel expenditures, some personnel expenditures are exempt explicitly by the bca, and others have been carved out by the obama administration, they have said they would keep them protected. but just to be clear, when we asked ben to write this paper for us, that was after ben friedman and i had written a paper arguing for cuts twice the size of sequestration annually over ten years. and so we have mapped out, and we're not the only ones, there are other organizations in this city that have mapped out other plans for reducing military spending not on the grounds that it has an economic effect, but because it is simply not necessary, because, to use the crime analogy, thankfully, crime has declined. and, therefore, the feed for those security services has also declined. so i would encourage you to look at our earlier study from 2010,

but others, sustainable defense task force, even bowles-simpson had some talk in there about military spending and what that would look like. >> right. >> what impact -- >> there's one further point to make, and that is if you look at the budgets, the baseline numbers excluding the overseas contingency operations, for the out years, those numbers are slightly phony because the cuts assume that the baseline actually will have been what would have been spent in absence of the sequestration. i'm not convinced of that at all. those numbers may have been smaller in which the sequestration cuts -- >> and i think, you know, adding to that, one of the reasons i'm in favor of a she questionser even regardless -- she questionser, even regardless of what happens, any strategy should cut with an across the board cut. maybe the defense cuts are too big, you know, in terms of security, but i do think at least some cuts across the board

even in defense need to be made. and one of the things we haven't mentioned is, you know, my area of expertise is the budget. i don't know a lot about military issues, but i do know this, if you put in place even one year of a sequester, the savings are not just for one year. >> right. >> in fact, the savings magnitude hugely over the next 5, 10, 20 years because what you've done, you've got a, you know, spending growing at this magnitude, and what you do is you ratchet it down by this amount in the first year. so, you know, you may save let's say it's $100 billion in the first year, but over ten years you're talking about $2 trillion in savings because every year you get this kind of, you know, a negative multiplier effect. >> change the baseline. >> yeah, exactly. and that's what happened in '86-'87 and, actually, is one of the things that helped produce the lower deficits in the 1990s. >> okay. we have time for one more question. right here, sir.

>> in respect to defense spending, economic effective defense spending, my name's jon shermer, u.s. army, obviously. the question is, well, there's three components to defense spending. you know, you've got your force structure, you've got your readynd, and you've got your modernization. and what are the effects of defense spend anything each of those on the economy? you know, et seems to me to look at it from the aggregate is interesting, but to also drill down into, you know, a dollar that goes into force structure, what does that buy us from an economic perspective, a dollar that goes into modernization, what does that buy us, and a dollar that goes into readiness, what does that buy us? >> you'd have to have a market in which those things are priced, and we don't have that. we just can ask the question much more qualitatively what are the contributions of those functions to, quote, national security, unquote, and then try to put a value on that, or at least an effectiveness measure. it's like trying to measure the

military effectiveness of a division. how do we do that? well, we have division-equivalent firepower, and we love scores and is all that stuff. but it's very difficult to measure those things in dollar terms. >> but, dr. fuller, you chose to focus on the procurement aspect, on the 45 million as opposed to other, and presumably there was a reason. maybe you could answer that question in a different sort of way, why you focused on that and not other aspects of military spending. >> in that october 2011 piece i did, i focused only on military equipment. and we had estimates of what kinds of cutbacks would, what the magnitudes would be across different procurement categories. and so it was easier to do, it was finite, it was early in the discussion of the budget control act. we always excluded military payroll because they had been largely exempted even though

there are cutbacks in the budget control act, number one, the one that's already in place. and those have been announced. but the others are nonmilitary, civilian dod workers and operations and maintenance. i find it differently than your three categories and procurement of hardware and software. we've covered the entire budget that would be eligible. doesn't mean that it'd all be hit equally hard. and so i think it's very difficult to say what the impacts would be. and then the opportunity costs of those kinds of -- which are what ben's talking about in some cases hard, impossible to analyze unless you have an alternative. >> all right. well, i want to thank you all. please join me in for a continued discussion in the george m. yeager conference center. [applause] thank you. just a few quick housekeeping notes. we will reconvene in the conference center on the second floor, there are restrooms on

the way. and one more thing, go orioles, go nats. [laughter] >> absolutely. great to see you again. >> a live picture this morning from the campus of hofstra university in hempstead, new york, where the second presidential debate between -- watch and engage with c-span at the presidential candidates meet in the second of three debates live tomorrow night from hofstra university in new york. our live debate preview will get underway at 7 eastern, the debate itself will start at 9 eastern. it's moderated by candy crowley. and afterwards we'll get your reactions. again, live coverage on the c-span networks. >> this tuesday president obama and republican candidate mitt romney meet at hofstra university in hempstead, long island, for their second of three debates. watch and engage with c-span's road to the white house

coverage. up next, a new hampshire governor's debate featuring the democratic and republican candidates. then, a look at the political unrest in the middle east. and later, retired supreme court justice john paul stevens speaks about -- >> also today on the c-span networks, a debate between the candidates in ohio's senate race. incumbent democrat sherrod brown meets josh mendel. live coverage courtesy of wzib-tv in cleveland begins at 12:30 p.m. eastern over on c-span. >> now, a debate between the candidates vying to be new hampshire's next governor. you'll hear from republican candidate ovide lamontagne, an attorney, and his democratic opponent, former state senator

maggie hassan. this event comes to you courtesy of wbin-tv. it's about an hour. ♪ >> moderator: good evening. i'm charlie sherman, and welcome to the first in our debate week series. tonight it's our pleasure to welcome the democrat and republican candidates in the race for governor of the state of new hampshire. over the next hour, we'll focus on the issues that matter most to the citizens of new hampshire. of but first, the debate rules. candidates will get one minute to respond to direct questions, 30-second rebuttals are available as time allows. we'll be doing two rounds of questions in which candidates will have up to 60 seconds in which to respond. we will also have questions from the debate's sponsor, aarp of new hampshire.

time permitting, we will also have a lightning round of questions where the candidates will have 30 seconds in which to answer those questions. the majority of the questions, however, will be posed by our distinguished panel of journalists in two separate panels. for our first panel, we have kevin landty began of the telegraph, howard auchilla from the ports mouth herald, and wbin news director martin morenz. now, let's meet the candidates. first, republican candidate ovide lamontagne, a business attorney and was the republican nominee for governor back in 1996. ovide and his wife, betty, reside with their three children in the city of manchester. and the democrat, maggie hassan, maggie is an attorney and the former new hampshire senate majority leader. maggie ander husband tom live in exeter, they have two children.

welcome all. now, let's get started. our first question comes from kevin of the telegraph. >> thank you, charlie, and good evening to you both. this is for mr. lamontagne. the new hampshire center for public policy studies released a report that saying new hampshire advantage, that mixture of low taxes and highly-educated residents that has powered the state's economy for decades is slipping away. what can be done to solve the problem? lamontagne: thank you, kevin, and thank you aarp new hampshire and wbin for sponsoring this debate this evening. it's an opportunity the for us to discuss and have a conversation with the voters of new hampshire about the future of our great state. we are seeing an erosion of the new hampshire advantage largely because of the failed policies of the last ten years, most of them led by maggie hassan and her colleagues in the new hampshire state senate and the new hampshire legislature. we've lost our edge because we've taken our eye off the ball. what has made new hampshire exceptional from a business perspective is low government regulation.

taxation that's kept in check and spending that's kept in check. as a governor of the state of new hampshire, i'll lead a renewal of our new hampshire advantage beginning with zero-based budgeting for our state budget, looking at a statewide economic development plan, appointing a business advocate to the governor's office to be a champion for business and then enacting business tax reform in new hampshire that will declare a tax holiday for job creators so we can jump-start our economy right here in new hampshire, kevin. >> ms. hassan? hassan: thank you very much to bin, aarp and our other sponsors. um, we are at a crossroads in new hampshire. we are either going to be able to continue on the path that we started and built with governor lynch, or we're going to choose a governor who would side with this extreme legislature and drive us backwards. i have an innovation plan that provides for targeted tax credits, technical assistance to our businesses and a strong and skilled work force that our businesses can compete and grow

and create jobs. it's in stark contrast to what's been going on in our state in the last two years and in stark contrast to the lack of a plan that my opponent has put forward. we need to focus on a skilled work force so that innovative companies will want to come to our state, and we can grow the economy. >> we have a follow-up question. >> thank you. ms. hassan, as you know, the report says the productivity of our labor force in recent years has lagged well behind other regions in the country and even some of our neighboring states. what one part of your jobs plan best addresses this challenge facing the state? hassan: well, i think a couple. first of all -- well, all three. the tax credits that i'd like to double the research and development tax credit, something i sponsored with governor lynch in the state senate. the technical assistance to our businesses, particularly our small businesses some of whom don't have the kind of resources and infrastructure. we need to be leveraging the the expertise of our university

system, for instance, and our colleges to help our small businesses. and then, also, focusing on making sure that we have a work force trained for the jobs of today and tomorrow. >> moderator: mr. lamontagne? lamontagne: the reason activity's down is, frankly, the workers of our tate are not given the opportunity to be as productive as possibility. overregulation by state government as well as the federal government has been cited as one of the major reasons that we have an economic recession continuing here in new hampshire. frankly, we are 30,000 jobs short of where we were at the time of the great recession. and we have to deregulate new hampshire in terms of the overregulation we have. part of my plan calls for that in a very specific and targeted way, and that'll help job productivity and worker product ivity. >> moderator: thank you. our next question comes from howard altschille, and it's on taxes. >> good evening to you both. if a pledge for income tax is right for today, why not for always? how do you reconcile your pledge

against an income tax with your opposition to the constitutional amendment on this november's ballot that would write an income tax ban into the constitution? hassan: well, thank you for the question. i oppose an income or sales tax, and i would veto it if it came to my desk. i have a record of that opposition, and i've kept that pledge in six years in the state senate. i also oppose the constitutional amendment because we should amend our constitution only when we absolutely need to. i trust the people of new hampshire to make sure that we don't have an income or sales tax, something they've done through their political system for decades. and i'm also confident that we shouldn't bind future generations, we should be focusing on educating our future generations so that they'll make their own fiscal policy. i'm confident when they do, they'll also oppose an income or sales tax and recognize it's not right for new hampshire. >> moderator: part two of your question? >> yes, mr. lamontagne, you support the amendment to the state constitution. does this mean you think the state's reliance on property taxes is the fairest way to fund

essential services? is. lamontagne: well, thank you for the question, howard. first of all, it's important to note that as a fourth generation new hampshire native, i know that the anti-broad based tax position is fundamental to our new hampshire advantage. now, my opponent was for an income tax and can ran on it before she now says she's against it and has never explained to the voters of new hampshire why she's come to this conversion experience. i am for a broad-based income tax ban in our constitution to assure future generations this won't be a threat. and i believe that local decisions should be supported by local funding. that's where the property tax comes in. but i also believe in targeted aid which is why i support a reversal of the claremont decision that has really destroyed local public policy making for education as well as local funding and destroyed the opportunity for the state to provide for targeted aid to help our cities and towns in that area. and then we need full funding of special education and other mechanisms that will lower the property tax burden.

but in the end it's a decision made by the decision makers in the cities and towns about how much they spend. >> moderator: do you have a follow? >> mr. lamontagne, specifically, do you have a plan to provide property tax relief to new hampshire residents? lamontagne: first of all, i do, and i think what it is is bringing back economic recovery to new hampshire. as goes economic recovery, so will go more revenues for state government, for example, and local communities in terms of broadening the tax base. that is the way it works. and then looking at opportunities for us to continue to provide incentives at the property tax level for senior citizens to stay in their homes as well as targeting aid to help those cities and towns that don't have the ability to provide education support because they don't have the fiscal capacity to support education decisions. glsm ms. hassan? hassan: as i said, i oppose an income or sales tax, a promise i have kept and i will continue to keep, and i've been very clear about that. but, you know, in a recent

debate last week ovide said that we should pass a constitutional amendment, another constitutional amendment he favors so that the state could completely walk away from its obligation to fund our local schools. and he said that in doing that somehow it wouldn't drive property taxes up. it will, in fact, drive property taxes up because today in derry $1 8 million of state aid that is not property tax related is going to our local schools. they would just more crowded, and property taxes would increase, and the quality of our education would go down. >> moderator: mr. lamontagne, you have 30 seconds to rebut. lamontagne: thank you. governor lynch and i actually supported the constitutional amendment in this last session of the legislature working together across the aisle. we were able to put together a plan that would restore education policy and funding back to the local communities with an opportunity for targeted aid and eliminate this artificial structure called the statewide property tax. i think it's absolutely critical that we move in this direction to stand with our families, our

teachers and our students to make sure they have the best education possible with the right targeted funding assistance. >> moderator: our next question comes from martin morenz of wbin, and it is for mr. lamontagne on higher education. >> thank you and good evening to you. lamontagne: good evening. >> mr. lamontagne, you have recently stated you support increasing state scholarship aid for students in new hampshire. how much money are we talking about, and who should get that money? how much can the state afford? can you provide some detail for us? lamontagne: thank you very much for the question. as a former teacher myself for three years as a high school social studies teacher, chairman of the state board of education and a father of two wonderful women who went through our school system here in new hampshire, i care deeply about education. and higher education is very important be both at the community college and the four-year degree program level. however, not all of our families can support or can afford what it costs to send their children to higher education.

that's why i support a targeted scholarship approach if there's additional monies to be invested in higher education here in new hampshire. beginning with the community college. i have a learn to earn program which leverages and marries, if you will, the interest of business and education to target aid and to make sure that those students will have a job at the end of that educational process. and that way we can keep our workers here and provide those educational opportunities, again, through an effort to support those families that need the assistance. that's what we should be focusing our efforts on. >> moderator: ms. hassan, you have one minute. hassan: this is one of the major differences between ovide and me. i have a plan that would begin restoring the drastic funding cut that is the legislature that ovide supports imposed on our university system and at the same time freeze our tuition. and ovide has said that the cost of tuition in our university and college system is not of utmost concern to him. well, it is to me. and the people of new hampshire should understand that. we need to make sure that our

colleges and universities are affordable for all of our students, not just those selected for a particular scholarship. because when we make sure that they can afford be school here, they will stay here to go to school, and they will be our work force of tomorrow. we're losing young people because it's less expensive to go to school in other states than it is here. so it's a major difference between the two of us. you know, this week ovide said that my focus on education, um, in terms of economic development is putting the cart before the horse. i don't think so at all. i think his approach is going to take us backwards to a horse and buggy economy. >> moderator: we have a follow-up from martin. >> ms. hassan, you've called for a tuition freeze for two years, the university system leaders have said they can do that providing you restore $100 million that was cut from their budget last year, but where are you going to find that money? hassan: one of the things i've also done that is different than my opponent is put forward concrete proposals about how we're going to begin restoring funding to the university system

and some other priorities that were cut so drastically by this legislature. so i would reverse some of the very bad decisions that this legislature made. for example, while they cut the university system by half, they also cut our cigarette tax. they might as well have said to our young people smoke more, study less. that's not going to help us grow our economy. they also laid off some auditors in our department of revenue. those positions need to be restored because those positions not only pay for themselves, they generate revenue from taxpayers who owe us money, and we need to make sure that we're all paying our fair share. and then i've also supported a high-end, highly-regulated casino near the border so that we can keep revenues that would otherwise go to massachusetts to build their schools, roads and bridges here in new hampshire and also address our social and safety concerns that is created by gambling. so those are some of the concrete proposals that i have in addition to making sure that we're growing the economy so that we can have the kind of revenues we need to fund our

priorities. >> moderator: mr. lamontagne, you have 60 seconds. lamontagne: thank you. at a time when most new hampshire families are struggling to make their budgets balance and meet, maggie is talking about taking more revenue, more monies out of the private sector. and she's also willing to trade off tuition caps for funding the university system when a lot of families can't afford the current price that it is. we are -- i'm very concerned about the tuition rate in the state, but i'm also concerned about those families where access to higher education, particularly at the community college level, is out of reach for them. that's why i think we need targeted aid in a public/private partnership through a scholarship program which i call learn to earn, something like an education cdfa where tax credits would be applied to provide scholarship support for our students and then to work on lowering costs of education. that's not -- capping tuition does not lore costs. working with our education leaders will lead to lowering of costs, and that's the focus i'll bring. we're not going to raise taxes

or fees on our citizens, unlike my opponent. i'm going to work within the means that are given to me like any family would, any business would. >> moderator: our next question comes from kevin landrigan for maggie hassan. >> as senate majority leader, you were a strong supporter of the loc tax, you spoke in favor of the campground tax and initially offered an aggressive state role in controlling health care costs, all of which were repealed or watered down. what single mettive achievement achievement -- legislative acheesmed would make voters see you as a successful leader for the state? hassan: thank you for the question. i'm very proud of the fact that i worked with governor lynch on the state budget in 2009 at the height of the worst economy since the great depression. and we made very difficult choices, but we balanced the budget leaving a $20 million surplus at the end of that time. the legislative accomplishment that i think speaks to my general approach and role is in my very first term when as a

member of the minority party i brought a coalition of republicans and democrats together to stand up for -- against insurance companies, for insurance consumers because insurance companies were discriminating against businesses with sick workers. and we got a coalition of republicans and democrats together to overturn that very misguided law. now, that is a law that would be reinstated under ovide lamontagne's leadership because he has signed a pledge to support an agenda that would deregulate all health insurance companies. and so it's really important that we understand what the stark choice is here. we need to make sure that insurance companies don't get to go between patients and their doctors, something that would happen if ovide's approach were followed. >> moderator: kevin, you have a follow up for mr. lamontagne. >> you've run for governor, congress and the u.s. senate and have not been successful in those campaigns previously. how have the times or how have you changed that would make us think the results november 6th

are going to be any different? lamontagne: well, i stand in the proud tradition of john sununu, conservatives who have run before, not been quite successful, but the times and their positions married, and i think that's where we are today. i come from a business perspective, and i'm a conquered outsider unlike my opponent whose real stock in trade in running for governor is that she was a majority leader of the state senate, and the facts don't side with maggie here on budgeting, on balancing the budget. the last budget they had during the great recession was out of balance to the point where the governor had to call a special session, $300 million out of balance. and every paper in the state called it either a phony budget or a budget that's not, we shouldn't be proud of, and they were right to do that. i bring real world business experience at a time when jobs is at the center of this campaign. jobs, the economy, reforming state government. and, kevin, i think my approach, putting my faith in the people and the businesses of this state and working with them, not ruling them, not trying to manipulate their prices and

their competitive environment, that's the approach we're going to take here in new hampshire under my leadership, and that's why we'll be success. >> moderator: our next question comes from howard, and that is to be addressed to ovide lamontagne. >> mr. lamontagne, last year the house passed a bill to allow virtually any adult in new hampshire to carry a concealed weapon without a permit. those who couldn't get a permit, including convicted felons, people convicted of domestic abuse and the mentally unstable could still possess a gun in their home. if it reaches your desk, will you sign that bill or veto it? lamontagne: the bill you've described, howard, is called constitutional carry. vermont has a constitutional carry law, too, and no one's accused vermont of being overly conservative. the reason for that is they put their trust, their confidence, their presumption in favor of law-abiding citizens to be able to carry when they see fit. and so i believe with the proper conditions i would support constitutional carry while

leaving in place the permitting process we have right now. speaking of gun owners, and i'm a gun owner, a hunter, a fisherman, an outdoorsman, and i have spoken with gun owners in vermont who says keep those in place so reciprocity will be recognized. there is an appropriate place here in this society of ours to respect a fundamental right, and that's a right to bear arms. it's part of our culture, it's part of our economy, our outdoors economy. and so i stand with our firearm owners, but it has to be appropriate conditions on the constitution carry legislation, and that's why it wasn't passed last year. >> moderator: ms. hassan, you have one minute. hassan: i support the second amendment and the right for people to hunt and defend themselves in their homes, but i also support common sense, and what's happened in this legislature over the last two years in terms of gun laws, the first thing they did when they took office in january was to allow guns into the statehouse. they've even proposed allowing

felons to carry guns. that's not common sense, and that's not the kind of leadership we need in new hampshire. i think it's always been the case in new hampshire where we've balanced the right of people to carry arms with common sense safety, and that's why in six years in the state senate i never voted to change our gun laws in new hampshire. i thought we had struck that right balance. but i am very concerned that today this legislature by allowing guns in the statehouse, by suggesting that college students should have them in their dorm rooms and by supporting a law that was passed over the governor's veto that allows criminals to open fire in public, they've gone too far. i'm very proud that the manchester police patrolmens' association has endorsed me in this campaign, and i will focus on public safety. >> moderator: for our next question we go to martin morenz, it is for ms. hassan on northern pass. >> ms. hassan, let's make a safe assumption, the corporate owners

of northern pass determine that burying the lines underground makes the project financially not feasible for them to pursue. if that's the case and transmission towers are proposed through the north country, will you support or oppose the plan? hassan: well, first of all, when you go up to the north country, you're reminded of what a spectacular state we all live in and how important those natural resources are to our quality of life, but also to our tourism economy. i didn't support the first proposal because i felt that community input about the height of the towers and the location of the towers hadn't been respected and also because it allowed for eminent domain for private be profit, something i don't support and i helped limit in the state senate. moving forward, away do need to make sure if this project is going to happen, new hampshire gets something out of it. actually, for instance, could lower its energy costs as a result of the project. but i'm not sure that we should close the door on burying the lines yet. i think there's a win/win here

that is possible, and i think any future proposal has to respect the community input of the local communities where towers would be. because without that kind of community support, it really shouldn't go forward. >> moderator: mr. lamontagne, you have 60 seconds. lamontagne: thank you. for the viewers, if you visit ovide2012.com, you'll find my position on northern pass. and in this regard there isn't that much difference, although there's probably prioritizing, that i would have a different approach than my opponent. i have a camp up in the north country in chatham, we have a family cabin, i spend my time there, and so i'm going to be very cautious about seeing anything happen to the north country that would deface the natural beauty there. but i want to make sure there's real value to new hampshire if that project comes through and minimal impact to our environment. that's why the lines should be buried as much as possible and look at other alternatives. finally, we should be able to negotiate on behalf of the citizens of new hampshire a

power purchase agreement that would allow us to keep that power here in new hampshire as an added benefit. >> moderator: thank you, mr. lamontagne. now we have a question from an aarp member, sharon stevens, her question: safe, affordable, accessible and user-friendly transportation options are very important to seniors here in new hampshire who are unable to drive. will you commit to finding options that provide flexibility in obtaining funding to provide greater mobility options for our citizens? ms. hassan? hassan: well, sharon, thank you for the question. we need to make sure that we come together as a state and find a way to do what we need to do to improve our transportation system. that includes our roads and bridges, but it also, obviously, includes the kind of transportation system that you're talking about and that many of our older citizens do need now or will need. that's one of the reasons that i

differ with my opponent about whether we should accept federal funds to study whether rails should come up to nashua and even manchester and even further north because we could certainly have great economic development if the rail came up to nashua, if it went to manchester where we could have an international airport and think about what that would do for our economy. so those, that's one of the differences because ovide supported the rejection of that federal money that would have allowed us with no strings attached to study the cost benefit analysis for all of our citizens. and we need to come together and make sure that we have a transportation system that works for all of us. >> moderator: mr. lamontagne, you have 60 seconds. lamontagne: thank you, sharon, for that question. i think what sharon was asking about is really accessibility to our senior citizens who are trying to live an independent life in their homes and communities, really more of a community-based approach. you know, i'm proud that my dad was for many years a caregiver working in manchester as a volunteer, driving citizens who

could not drive themselves but wanted to live in their homes. our great state has been successful because we've partnered with charitable and civic organizations. we haven't just said we have to let government do this. we've said we're going to work with these organizations. and, again, it's a regional approach we need to take. some areas more urbanized area like manchester is going to have a different need, infrastructure need, let's say, than a more rural community like peter borrow or some other parking lots of our state. so we need to work with regional planners, with local government and private organizations to come up with that safety net to provide for enhanced transportation for our senior citizens and those with disabilities as well. and i think we can do that in partnership, and that would be a focus of the infrastructure improvements i would want to lead in this state. >> moderator: thank you, mr. lamontagne. stay with us, we will be right back with more of the wbin 18 gubernatorial debate. ♪ >> moderator: welcome back to the wbin gubernatorial debate,

we're now joined by distinguished journalist casey freresser from the keen sentinel and clay wirestone from the concord monitor. our wbin news director martin morenz, he's still with us. we wouldn't let him get away. first up, another aarp question from a member here in the new hampshire, rick crocker. according to aarp new hampshire, over 90% of seniors prefer in-home care rather than nursing home care. will you take advantage of new programs like medicaid managed care and federal incentives for home and community-based care? if not, what is your alternative? we'll start with mr. lamontagne. lamontagne: well, thank you for the question, rick. it's a very timely question because as new hampshire makes the decision about whether or not to participate in obamacare, the way it's been proposed -- we can call it obamacare now, the

president says -- one of the things we need to be mindful of is obamacare funds itself in part because of reductions in medicare, home health care and other programs which is why i propose a new hampshire-based solution. obamacare would force us to have our uninsured citizens covered under medicaid which is a state/federal program. i would say let's block grant that money back to the state, meeting certain minimum requirements which is covering all lives but providing more flexibility and directing resources to help our citizens stay at home. to provide them an ability to migrate at their that muchal pace into assistedlying and nursing homes and do it the new hampshire way. that's going to be far more effective in terms of losts and quality and affordability and accessibility, and that that's the approach i would take. >> moderator: ms. hassan, you have one minute. hassan: thank you, and thank you for the question. it's very important we support and take advantage of incentives for community-based home care for our seniors, and it's

something i have worked to support. but what people should also understand is that when ovide talks about his health care plans, he's talking about withdrawing the state from the federal medicare program. as well as rejecting additional federal money that would help us increase access in the medicaid program. so ovide has suggested that we actually withdraw from medicare and would allow the new hampshire legislature to run health care for our seniors. this is the same legislature that drastically cut funding to our hospitals, limiting patient access to our citizens throughout the state. that isn't something i would do. i think we need to support medicare and make sure that our seniors have high quality care, and i also would work with the medicaid managed program for community-based and home care. >> moderator: thank you, ms. hassan. now to our panel, up first, case y with a question on private

citizens. >> good evening to you both. a plan to privatize the state's prisons is being explored by the department of corrections. you've both expressed reservations about this idea. are there particular areas of state government that you think could better be handled by the private sector? hassan: well, thank you for the question, and you're right, i do pose privatization of prisons because the public safety record of the companies that run those prisons as well as the financial record is that it doesn't improve public safety, and it actually often costs taxpayers more in the long run. so i think it's a bad idea. and i'm very proud that the manchester police patrolmens' association is supporting me because of the work i've done in public safety generally. in terms of other areas, um, i think it's always worth being very careful to consider how we fund state government. i've proposed budget reforms that would increase efficiencies so we could save money in state government, and i'd certainly look at issues like potential

partner, private/public partnerships around transportation infrastructure as ways of bringing the private sector in. but it's also just very important that we focus on making state government as integrated and efficient as we can. >> moderator: mr. lamontagne, you have one minute. lamontagne: thank you, casey. when it comes to the care of human lives, i draw from my experience that we need to make sure that all human beings within the care of government are given the respect and the dignity that they deserve. that comes from my pro-life position, and i think it's important that we look at privatization when it comes to the care of human beings from the point of view of our presumption against it, putting the burden on those who would propose to privatize something like housing for individuals through the prisons which is a correctional facility and operation. however, i would look at other opportunities. in fact, my presumption would shift when it comes to other functions of state government. information technology, we're way behind in new hampshire. we can take advantage of the private sector in terms of coming up with a public/private partnership to bring us to the

modern age. that will help reform state government. and i am not for taking over medicare as my opponent says. i'm about new hampshire-based solutions when it comes to health care and other areas that the private sector can help us a lot here in this state to do a better job. >> moderator: our next question comes from clay wirestone of the concord monitor, and it is to mr. lamontagne on medicaid. >> yes. just hello to you both, just doubling back to medicaid just for a moment here. thanks to the recent supreme court ruling on obamacare, states do have a say now on whether to accept federal dollars to expand their medicaid programs. and as you just mentioned, you've backed accepting such money if it's in the form of a block grant. but can you assure new hampshire residents that if we accept the money in such a block grant that it would actually increase insurance coverage? lamontagne: actually, i can. my approach -- and this is very important for job creation here in new hampshire -- health care is one of the major issues that is stopping businesses from

expanding, new businesses from coming to new hampshire because of the costs of health insurance. and largely because of the things we've done to ourselves. we need a overall health care reform in new hampshire, and my proposal would be to take those dollars, those additional dollars under the obamacare bill and use it to fund a high-risk pool. working with our health insurers in the private insurance market and direct individuals to access health care through their businesses or on their own through a risk pool and then through the private insurance marketplace. and if we can expand the number of insurers here in the state, we're going to have a much better delivery system. we're going to contain costs, increase quality. but we have to do it the new hampshire way. >> moderator: ms. hassan? hassan: with respect, i don't think ovide is being straightforward about his health care plans. obamacare calls for about an additional billion dollars in federal money to come to the state of new hampshire to expand coverage for people, individuals earning $15,000 or less,

families earning $30,000 or less so that we can have affordable, high quality health care for more and more of our citizens and invest in the preventive and primary care so that our health care costs go down. ovide has opposed taking that money, and for him to imply that there's an option on the table to take that billion dollars and somehow use it differently is really misleading. and i will say that on his web site, ovide posts an op-ed he wrote about opting out of medicare and has supported a legislature that passed a bill that would have us opt out of medicare allowing that legislature to make health care decisions for our seniors, a move that the new hampshire council on aging has said would be devastating for our seniors. >> moderator: mr. lamontagne, you have a 30-second rebuttal. lamontagne: the facts don't line up with what maggie said. first of all, the supreme court has said the obamacare bill is an election now. we cannot force, the federal

government cannot force the states to bring in uninsureds to medicaid. even governor lynch was opposed to that proposal back in 2009. and that's why we have leverage now. we can work with the federal government not to expand medicaid which is a very specialized program. as a foster parent of a special needs young man, i know how that program works, and that's not what we're proposing to do. we're proposing to take those dollars and use them through a private insurance pool, essentially, and a high-risk component to it. and, you know, in terms of medicare, it's a federal program, and there's a lot of confusion about this. at the national level and here locally, there's nothing the governor of new hampshire can do about that. i wasn't in the legislature last year. i am running for governor. and i'm asking the people of new hampshire to look at my record and look at the positions i've taken and the specific plans on our web site and make a decision as to who has the better idea for you and for your families. >> moderator: ms. hassan, you have 30 seconds. hassan: charlie, this is one of those areas where, again, i don't think ovide is being

straightforward. there is no option from the federal government on the table to take the billion dollars and do something else with it. so for him to say that there is is really misleading. he is opposing taking the money from the federal government at the same time when there have been significant cuts to our hospitals and our health care system in the state has been decimated by the actions of this legislature. and you are running for governor, ovide, and governors do get to decide, for instance, whether to sign a bill that would have the state opt out of medicare, a bill that this legislature passed, a legislature that ovide has supported and praised. so it's really important for voters to understand that the governor does have influence on this, and if ovide thinks that the golf didn't, then he shouldn't be talking about his medicare plan on his web site. >> moderator: we go to martin morenz for a question for ms. hassan. >> thanks, charlie. new hampshire's the lowest funded state for tourism in the country. how could marketing for tourism be better funded in new hampshire, and do you have any

novel ideas for marketing in the state? hassan: one of the things we were able to do in the 2009 budget was specify funds from the rooms and meals tax towards a marketing effort for our state. and that's something we partnered with the hospitality industry to do, and it began to have great success. we've actually seen some great pick up in our tourism business in the last couple of years. but this legislature took away that money from that dedicated fund and effort. what i want to do as governor, again, is make sure that we have a transportation infrastructure that welcomes tourists to our state, make sure we look very carefully at building a manchester international airport if we can get rail up there to grow our economy and expand our international trade efforts. again, to have better relationships with our countries and other economies to bring more and more people to the state. those are the kind of things that we can really do to help our tourist industry along with some of the technical assistance that i talk about in my innovation plan to help

especially small businesses in that industry make sure they're growing their businesses and building international trade. >> moderator: mr. lamontagne, you have 60 seconds. lamontagne: the 2009 budget took some of the rooms and meals tax, about 6%, to use it as a funding stream for some of the credit card borrowing that maggie can and her colleagues implemented in new hampshire. her budget was not an honest budget, taking expenses off line and using the rooms and meals taxes which would have been, should have been used and targeted to promote tourism. that's not what happened. i think we need to be straight with the people of new hampshire. if there are dedicated funds and a commitment to fund tourism promotion, we should do that. and then we should work with a statewide economic development plan that takes into consideration that tourism industry that's such an important part of our fabric here in new hampshire and target the resources to support be it. that's the kind of leadership i'll bring to economic development here in new hampshire. >> moderator: our next question is from casey ferrar for mr. lamontagne. >> mr. lamontagne, you've been

criticized for your stance supporting expanded gaming at rockingham park, a company represented by your law firm. why is rockingham park the only place for it and why not follow the competitive bid process for granting a state contract? wouldn't everyone involved benefit from a traction parent process? lamontagne: it would be a transparent process if the bill provides, and this is what i would ask for, expanded gaming for purposes of economic development, look at the regions of our state. and the only part of our state that has had more than 100 years of gambling or gaming activities is rockingham park on the border of massachusetts along i-93 right off an exit. it's the logical place to bring in the economy from the northern massachusetts sector and to focus on that. and that's transparent. bills that are brought forward that actually declare what they're going to do is going to give people a chance to be heard on this. if i'm elected governor, i'm leaving my firm. sad to say, but i will have to.

so i will not have any vested interest. i don't have a vested interest in this proposal at this time. i have an interest in making sure that we contain the growth of expanded gaming. my opponent would have it anywhere in the state, at least has proposed that in the past. mine is a targeted approach for economic development of an area that wants it, and that's salem, new hampshire. >> moderator: ms. hassan? hassan: well, i do support a casino near the border. my concern about ovide's proposal is that he is giving up the opportunity to get the very best deal for the state that he can get because if you don't have a competitive bidding process and if rockingham knows it's been preselected, we're not going to have the negotiating power that we would otherwise have to make sure that the state is getting the best possible deal for our citizens. not only to make sure we have adequate revenues to help with economic development, but also to have adequate revenues to address the social and safety concerns that come with gambling.

and i don't think ovide's being straightforward either about his firm's relationship with rockingham park. they are a current client, they currently pay fees to his law firm, he's been a lobbyist and a lawyer with that law firm, and i think it's wrong and, um, really gives people a lack of confidence in our government for someone running for governor to preselect a client's location without a transparent or competitive bidding process. lamontagne: both of us are part of large firms in this region, and we have a lot of clients who have interests, and we could go back and forth as to the clients maggie represents or her firm does. i've not been a lobbyist for rockingham park, and what's important is that we have a targeted approach on this issue, one that the people of new hampshire can support, and there's no more transparent way to do it than through the legislative process where there are public hearings, and we don't leave it to chance that somehow the system is rigged. it's right there and transparent. and i think that's what people

in new hampshire want to know, what is the strategic decision being made, and where are we going to place this if we have it at all. >> moderator: our next question comes from clay wirestone of the concord monitor to ms. has, san. >> both you and mr. lamontagne have both voiced support for legalizing medical marijuana, but democrats and republicans in the new hampshire legislature have spent six years trying to earn the backing of governor john lynch who said philosophically that he budget against it. so -- he wasn't against it. so what controls on in the now-illegal drug, marijuana, would have to be in place for you to sign such a bill? hassan: thank you for the question. and i do support, um, an appropriate medical marijuana bill. one of the things we heard about when i was in the state senate was from citizens around the state who suffer from debilitating conditions and find their only relief to really difficult and horrible pain in medical marijuana. so i think it's important that we find a way to make sure that

we can have prescribed medical marijuana. you need to make sure that you are identifying the conditions for which it can be prescribed, it needs to be prescribed by a doctor, and then i think that the thing that has been a challenge is making sure that we have a dispensing system that works for the people of new hampshire and that is easy for our public safety officers to enforce. so we need to have dispensaries that are not-for-profits, that are controlled closely, um, and we need to make sure that we don't turn into a system like california where there's been real problems with the dispensing aspect of it. >> moderator: mr. lamontagne, you have one minute. lamontagne: there's nothing more personal than an experience with working with a primary care physician, working with your. >>s and those providers, and if a physician feels that given the circumstances that a patient presents with medical marijuana can help that patient, we ought to make sure that that's available for the patient and the doctor to prescribe. but the prescription needs to be

handled not only through a doctor's office, but by a dispensary which is a pharmacy. and that needs to be done in conjunction with the federal drug administration and the federal authorities need to know about this. and then we also need to make sure we track this particular pharmaceutical product like we do now under new hampshire law which was passed last session to track other kinds of pharmaceutical products where people can become aconsistented and so forth. with appropriate controls, appropriate medicinal reasons, we can have this in new hampshire as they've just passed in the connecticut. >> moderator: our next question comes from wbin's martin morenz to ovide lamontagne on right to work. >> mr. lamontagne, you were a supporter of right to work. how do you expect to be able to work with state employees in new hampshire if your agenda, essentially, attacks their current employment status, or does it? lamontagne: it really doesn't attack the current employment status at all. what it does is it gives freedom of choice to our employees to choose whether or not they want

to become part of the union in the workplace. and that's all that right to work really is. it's empowering the individual. it's giving the individuals within a bargaining unit who's working in a mace of business the ability -- in a place of business the ability to vote with their feet. and it injects a certain level of accountability which is presently not there with an existing union shop. but right to work is even more important than that, it is a marketing tool for new hampshire. if you look at the states that have adopted right to work, they're seeing their economies growing at a faster rate than ours. oklahoma has seen an if-migration of workers. the center for public policy has pointed to as lagging in new hampshire. we have an opportunity to brand our state, to make our state a more competitive state to attract new businesses and empower our employees to decide for themselves whether or not they want to become part of a union. >> moderator: ms. hassan, you have one minute. last haas well, thank you for the question. i oppose right to work because

what it does is allow the government, the state of new hampshire, to tell employers and employees what kind of bargaining, what kind of contract they can agree on. because no employee's required to join a union. they're only required to pay dues if in the collective bargaining process the employer and employees actually agree to it. so i don't want the state of new hampshire to get in the way of that contract. and the other thing is, you know, i was just on the phone with our commissioner of economic development today, george bald, who pointed out to me in the right-to-work states, there are 23 of them now, unemployment rate is almost double ours, the poverty rate is almost double ours. why would we want to do that in finally, right to work set it is wrong tone. i've been a labor and employment lawyer for most of my career. the most successful businesses partner with their employees because they want the same thing which is to grow the economy. and so in the new hampshire senate working with governor lynch we put together job training programs, the new hampshire working program,

collaboratively with employees and labor unions, and those programs moved our state forward. that that's the approach i'd take as governor. >> moderator: mr. lamontagne, you have 30 seconds for a rebuttal. lamontagne: there's a sharp distinction on where my opponent stands, i stand for freedom and liberty for our workers. and that's an important issue for not only the workplace, but also new hampshire as a state. and i would submit to any viewer that wants to know more about right to work to take a look at the states that, in fact, have right to work in them. we'd be the first state north of virginia, east of indiana to be a right-to-work state, we'd be the only state in our region. we would be a magnet for new businesses to come here, and it's part of the economic development and recovery of new hampshire. >> moderator: ms. hassan, if you would like 30 seconds for rebuttal? hassan: yes, tild. it's pitting workers and employers against each other. we need to include everybody in the economic life of our state.

right to work does have the state interfering with collective bargaining agreements, but more importantly, it pushes people out of the process. we need to look at the states that have right to work. they have a standard of living much lore than we do, and we shouldn't be, we shouldn't be trying to emulate that. >> moderator: for our next question we go to casey ferrar of the keane sentinel for a question to ms. hassan. >> the state board of education recently said they would stop taking application applications for new charter schools because they feared there wouldn't be enough funding. would you make funding of charter schools a priority? hassan: well, when i was in the state senate, i fought for hard for funding for charter schools, a movement i support because it's a critical piece of a strong public education system. one of the differences between me and my opponent is that when he was chair of the board of education back in the '90s, his sole accomplishment was rejecting millions of federal dollars for our local schools. one of the things that has been

good about the charter school movement is that we have been able to get federal dollars in to support them. the difficulty has been that once the federal dollars go away, we've needed some state funds to continue the support without impacting dramatically the cash flow of the local schools that children who go to the public charter schools may go to. and that's something i'm exited -- committed to working on because they are an important component of our school system. what isn't going to help our school system is my opponent's approach to state funding of education which would be to allow with a constitutional amendment the state to walk away from funding public education, driving our property taxes up and our class sizes up and bringing the quality of our education down. >> moderator: mr. lamontagne, you have 60 seconds. lamontagne: thank you. once again, the facts are not on maggie's side here. when i was chairman of the state board of education, i was critically important as part of the team to actually pass the first, the initial charter school legislation in new hampshire. if it were not for my leadership working with the leadership of

the senate and house and governor merrill, we would not have charter schools in the state. my accomplishments at the state board of education including raising teacher certificateification standards, that's very important. the charter schools are part of the delivery system now which i'm proud to call part of our agenda, my agenera baa back in 1996. the state board of education should not be standing in the way of these new charters being issued. the funding needs to follow. i will definitely fund charter schools, but i also think we need more choice in education. the decentralized delivery system that is basically designed on post-world war i models and to give more power and opportunity to families and students and teachers. i'm a former teacher. to work and developing the best system for the child where they can learn the best. >> moderator: for our final question we go to clay wirestone, and candidates will have just 30 seconds on this final question. >> candidate, this goes first to mr. lamontagne.

you've downplayed proposals to repeal gay marriage saying it's not a priority for you, but last spring you stood with the house speaker at a rally on the statehouse lawn and essentially pledged to help repeal the law. should voters believe what you emphasize now or what you were emphasizing then? lamontagne: well, what the voters should believe is what i have on my web site and my prosperity agenda. it's focused on jobs, the economy and reforming state government. and that's critically important right now in these times. i'm a conservative, i'm not hiding from that. and if the legislature were to pass a bill that would respect existing marriages, both gay marriages as well as heterosexual marriages, provide civil unions, i would support repealing the gay marriage law now and going to respect ago man and a woman as the marital state in new hampshire, get giving rights, civil rights to those who are of same-sex orientation. >> moderator: ms. hassan, you have 30 seconds. hassan: i support marriage equality. you know, i was on a plane last spring when a man sitting next

to me said he recruits for a new hampshire business, and marriage equality is a major recruit m tool for him because people are drawn to our state because we want to include all people of talent and energy in our economy. um, but, you know, on this along with issues surrounding women's health care, women's access to cancer screenings, birth control and the funding of planned parenthood, ovide has a very extreme agenda. he has supported a legislature with that extreme agenda, and he will sign those bills should he come to his desk as governor. >> moderator: you have 30 seconds if you'd like a rebuttal. lamontagne: i think the record is very clear, it should be about jobs and the economy. that's what people around the state have told me when i've campaigned in their communities and business, and that's the focus i'll bring. i'll be a leader for change here in new hampshire working with our legislature to get a right agenda set and the right agenda's about jobs and the economy. >> moderator: earlier this evening a coin flip was held to see who would select to make their closing arguments, their closing statements last. the coin flip was won by

ms. hassan, she has selected to go last, so, mr. lamontagne, you have one minute for your closing statement. lamontagne: thank you very much, charlie, thank you for the panelists who have been here, thank you, aarp and wbin for hosting this debate. this is a critically important election here in new hampshire, an opportunity to chart a new course of prosperity for our citizens, one that offers a brighter future or our young people. new hampshire's been based on the work ethic, the self-sacrifice of generations of families. i'm the beneficiary of those sacrifices myself. and i want to make sure we leave new hampshire in a better place than we found it, than we inherited it. i need your help though. i'll be a governor for all the people, and i'm going to sign or veto any bill that comes to me, and i'll show leadership in the way we set policy and work together across the aisle. but i need your help in charting this new course. i ask you to join our team at ovide2012.com, and i ask for

your vote and support. together we can make new hampshire the very best state to do business, to raise a family and to live free. thank you very much. >> moderator: thank you, mr. lamontagne. ms. hassan, you have one minute. hassan: thank you, charlie, our panelists and sponsors for hosting this debate tonight. new hampshire is, indeed, at a crossroads, and the choice before voters in this election is very, very stark. we can either continue on the path set by governor john lynch bringing people together, moving forward and building our economy, or we can elect a governor who will side with this extreme legislature where the needs of middle class families take a backseat to an extreme and divisive agenda. my opponent thinks it's wrong for the state to insure that every child have kindergarten, access to public kinder kindergarten. he would have us opt out of medicare, he would defund planned parenthood, raising health care costs for women around the state. those are just some of the examples of his extreme agenda that he's indicated. he will sign and support if they come to his desk.

i have an innovative economic plan with tax credits, technical assistance, um, and a strong work force that will help all our families have opportunity. i oppose an income and a sales tax and have balanced budgets and will do so as your governor. i ask for your support and your vote. >> moderator: thank you, ms. hassan. on behalfover our sponsor, aarp new hampshire, we at wbin 18 would like to thank the candidates and you, our audience, for joining us this evening. please come back again tomorrow night at 8 p.m. when candidates for new hampshire's first congressional district, former congresswoman carol shea-porter and congressman frank giuinta meet to debate right here on wbin 18. good night, everybody. >> take a look at c-span's debate hub. there's video of the vice presidential debate as well as the presidential debate from earlier this month. or see individual clips of each question, and tuesday on this web site you can see live

behind-the-scenes coverage including the spin room. watch and engage with live tweets from political reporters and other viewers and add your own. c-span.org/debates. >> watch and engage with c-span as president obama and republican candidate mitt romney meet this tuesday for a town hall-style presidential debate as they answer questions from the public at hofstra university in hempstead, long island. next, a knell with the new -- fellow with the new america foundation gives his insight on the political unrest in the middle east following his recent trips to egypt, syria and libya. and after that we're live with remarks by retired supreme court justice john paul stevens on gun laws, gun violence and his dissents on the court's cases involving the second amendment. ..

and recently he was killed in fighting in the city so i just want to say. i want to start today why talking about libya. the biggest dilemma is the militia problem. to understand that you need to understand the country's history. libya began in the malarkey from 1951 to 1969. gaddafi continued this and was

frustrated so he created people follow or we recreated power to the municipalities and dismantled ministries and wanted to distribute revenue from the people to the governor planning and would emphasize in 1998 the green charter human rights where the people exercise the power directly without intermediary or representative. formal verses in the formal authority that weaken the state institutions. in 1977, he created the revolutionary committees which had arrest powers and he created revolutionary courts that had palace of prosecution and execution. in doing so he shifted power from legitimate state institutions to revolutionary wants. all these policies make the state virtually nonexistent beyond the course of power and the extractions. the 2011 revolution continued

within days of the resolution, the national transition was an operation group that was established to the opposition government. the people that didn't have a lot of governing experience. but beyond libyans were very happy but over time realized there was no transparency or move to dismantle the militia. the militia of the country powerbrokers were regional militia engaged in retribution against gadhafi loyalists. also between the militias in the city -- okay. there's also the militia have engaged in a lot of vandalism and one not. so today's dilemma there is no state institution and there is a

weak national security forces and that translates into a weak central government. and in the political level we've major alogical troubles. the national nsa led by the foreign prime minister came out on top of the recent elections, but he has a lot of enemies and the most powerful militia from libya comes from the city. there is historical animosity between the tribe and the city. he's accusing speak of loyalists from the tribe so when the enemies block him from becoming prime minister. the party is descended from the libyan national salvation fund and major groups created in 1981. they were able to get the positions of partisan prime

minister. because they were the operation party they were able to stop the cabinet with exile dissident and this angered the local parliamentarians. we also have the regional parties such as the cities were the strongest militia came from. they were not happy with the representation they got neither. so what happened, and also there were a number of gadhafi loyalists. so a lot of people said we don't know these people because they came from abroad. they are gadhafi loyalists and they don't have regional representation is and undermine and torpedo the prime minister government where they have no prime minister when dealing with the biggest revolution with the attack. i want to not talk about syria. this was written in the fourth century bc. they've been historically

unstable by the nomadic invaders we had a mountain offering persecuted minorities. we never had a cohesive state. this basically led to what the journalists called the struggle for syria. this really changed what happened to al asad in 1970. he created a strong central government that provided people stability and security in exchange for them giving up wall street and build a coalition of minorities by the rule of sunni. when the revolution began, many members of the coalition began to unravel. when we saw the protests in the cities in the urban cities such as holmes there was no surprise because these areas rose up in the insurrection in the late

70's and early 1980's. the sunnis were very upset because the regime from the northwest areas where they dominate the areas so they were usurping a lot of their privilege. but now when we see protests in the rural sunni areas that were of the regime's support and there was a lot of trouble for the regime. we shouldn't estimate the seen how one of the regime many people still support it. people don't want instability. a lot of people don't understand what the revolution is about. when i was in the province, there were certain areas that my friends didn't want to take us because they said they were either pro regime and these were sunni villages, we are not talking about the minority villages. from time to time the regime is

on the brink of collapse. the regime can still use its air power. the core support for the regime are still there. the levels are very good. they know how to fight and sustain. there is coordination between the different brigades. they know how to gather intelligence in attacks using different types of weapons. i didn't see this during my six months in libya where the rebels would move forward during the day and fall back at night. they didn't hold positions. we see a lot of difference with the rebels and syria. jihadists have been spotted on the front line and numbers. the jihadists camps that are being run. a lot of the tension is found in an organization drawing in the young syrians. the syrian army as it is called

but isn't happy about it. we hear of disputes between the national syrians and more national syrian units and more in theological ones. saudi arabia units may be getting better weapons. the regime is not going to collapse as we saw in iraq and libya. the corps is based on the contact regions. they have legitimate interests and concerns on international community needs to address. if it falls they are going to move where they predominate. this would be the more coastal area and a border with lebanon and provide them with services. this is why the regime moved chemical weapons so they could not allow for those areas to be slaughtered and massacred. i want to finish by talking about egypt.

the muslim brotherhood there's internal trouble in the organization that wants to stay true to the group's ideas and another one that knows governing exchanges. the group can't decide what it wants to focus on and as a result its message is muddled. the islamists i want to talk about this, i'm not so much talking about the muslim brotherhood as i am the party on the muslim brotherhood had years of political experience in organization and they had representation in the parliament but they were new to politics and many candidates won and they just don't know how to be good politicians. so what we need to do in the situation is look back at other countries where the religious parties came to power in very large numbers to understand happened to be a great example is israel's party that's what i

rabbis. when they started winning seats in large numbers in the late 1980's and early 1990's, they had to move people into the parliament that didn't have political experience. they were second-tier political hacks. a number of these people when they came in and solve the power they could have comedy to get advantage of them and a member of the members of the party went to prison on charges of corruption charges including its leader. we are already seeing the beginning of the disenchantment and problems with the salafist party. one was caught in the car with a woman at a late hour in a deserted area. another one came to parliament with bandages on his nose and said he was beat up but it turns out he had plastic surgery. these people are supposed to be a pious muslim and set an example for society but we are

seeing that they are being tempted and corrupted by the same temptations that undermine the politicians during feed mubarak regime. egypt -- you can't govern a society that is ungovernable. no political party can fix egypt's political role. there are too many people, not enough jobs, not enough agricultural resources. egypt is falling. people are frustrated. it's not the slow pace of political change that is frustrating them. the widespread electrical shortages. people want responsive government and that is not going to happen in a country like egypt. we hear a lot about the lack of security, the police on the street after the revolution. people are being robbed. one of the big things when i was in egypt this summer that was in the papers is people are getting beat up in hospitals. they were just coming in and beating people up.

shifting back to politics, egypt makes mad. they've been criticized in an on charismatic leader and the consolation prize the bebb antioco brotherhood put forth when the chief judge would disqualified from running for president. he was described as, quote, a spare tire much of the criticisms against anwar sadat in 1970 but quickly made the society and chartered the policy course no one will ever forget, first by his participation in the 1973 war with the egyptian forces in the canal and brought back to egypt after the disaster and the catastrophe of 1967. and second the camp david accordance. the question in washington is whether the revolution will lead to egypt shifting out of america. to answer this we need to look

at egypt's history he was on the lines when he came to power. he was very close with india. by the time he died in 1970, russian fighter pilots were skirmishing with the israelis over cyanide and russian was virtually a second language in alexandria because the city had so many russian advisers. in egypt, economic policy drives foreign policy. first it was the russians and now it's the americans. if morsi cheeks mahmoud ahmadinejad's handan conference it doesn't matter because when president obama calls him, morsi does what the president tells him to do. because economic policy drives the policy egypt isn't going to find new friends like china to help them out. you know, morsi had a big trip to china recently. china can't provide egypt the billions of dollars in aid that needs. countries like saudi arabia have

a lot of the money that egypt needs, but they've just been slow to throw it out. the only american -- only america has experience and resources to provide egypt with the aid that it needs. finally i want to talk about the peninsula. the foreign jihadists are moving in, recently 16 attacks across the border raids into israel. it's not going away for a long time. the egyptian army just has not prepared to deal with the threat, doesn't have experience in the counterterrorism counterinsurgency operations. during the islamic inspection of the 1990's, the egyptian -- the government relied on the police forces and the intelligence services to put down the rebellion, not the military. also one of the problems and the organizations called the central security forces to read these are the people according to the camp david accord, egypt had

been the miniaturized has sinai. there are no soldiers. there are only people from the organization called the central security forces or csf. they still need to serve their mandatory military conscription, and these are the people that are basically on the front lines. so the because the military does not have experience dealing with the jihadists or what happened, they needed to respond to societies to site anger after the soldiers were killed, so they bombed a base, and anybody that knows or has experience with counterterrorism or counterinsurgency knows the first thing you want to do is capture someone because they can give you information and intelligence about an organization. when you drop bombs on people, you're not going to get anything. now what we are hearing is when they dropped the bomb there was nobody even there because if people died, they said there were deaths on the side of

jihadists and when there is a death on this side of jihadists it usually has a funeral that follow. locals said there were no funerals. so the jihadists problem is not going to go away. basically the army doesn't have an answer for it. thank you. >> what's your understanding of what happened at benghazi at the american consulate? >> what happened in benghazi had nothing to do with the protest. we know based on the discussions with people that were there that might it was highly sophisticated. the coordination, the weapons at the people used, and these fall on an organization called sharia and this was a small brigade

that is not as strong as the regional brigade. it's also not as strong as the more radiological based ones like the 17th with a shield which are the strong ones. and for an organization, to put a blame on an organization like the sure via but cannot fight on the level of the other organizations is just missing the point. as more and more information comes out, we are going to learn that about the organizations and the movements that were involved that have a lot more to do than just being in libya. >> meaning it's very likely there was a foreign component was driving what happened on the ground but might. >> -- that night. >> having spent six months in libya after the fall, do you think that the attack on the consulate is sort of ran out

liar or represents the future of libya? >> that's an excellent question. the problem in libya is there is no security and we saw this in the regional security reports that came out in the congressional testimony and the security situation is much worse than we first imagined based on some of the documents. the security services can provide any level of security. the reservation against the gadhafi loyalists, all parts of the attacks against people you don't like you just script then light soprano style. we also need to look at what happened in libya. his directly, and i'm talking really since foreigners came in how they always control the coastal areas and the hinterlands have always been

controlled by tribes or groups that were opposed to the government. only really with when gadhafi took power and established a real regime where he was able to expand power into the hinterlands and now since the revolution we've seen a recession of that power and it's only in some coastal areas. not even that. and because there is no national security service, they can't provide any type of security and stability. meaning at this point in time of the united states gave them the names it is highly unlikely they could apprehend them without really good training and possibly having american special forces on the ground helping. >> do you have a sense of how chaotic it is? if iraq, 2007 is a ten, or 2006

is at him, where would you score this situation in libya? >> i spent a lot of time in iraq during the war and i saw the security situation progressively de tiers. on a slippery slope. i think that we are at the beginning right after the american occupation 2003 right before april, 2004 where you have the incident in fallujah and al-sadr. as we have the situation in libya and if the government doesn't step up and established authority soon, we could see what happens in iraq after april, 2004. >> what are the differences? is there a shia-sunni component? not much compared to iraq, right? >> the population as homogeneous. i think about 90% arab and 10%

sunni arab. so you are not going to see that minorities split. loyalists are weak, the gadhafi loyalists engaged in some type of attack but they are not as strong as we saw the insurgency of the beginning of iraq it what we are going to see is a weak central government doesn't have control over the entire country coming and that invites the foreign jihadists into the can't you can't really take on. >> do you have a sense of the scale of that? is that marginal, is that a growing problem, is that an exaggerated problem? >> well, the thing is we thought they were small numbers of foreigners early on and they were just a nuisance until the attack and then we were shocked by the level of sophistication.

>> that goes back to the questions are you are saying the attack was not an alibi but is perhaps a harbinger? >> it's possible there could be more attacks like this in the future. >> when you say foreigners, where are they from? >> that's the thing we don't know where they are from. but the people involved in these attacks don't appear based on discussions with the people who were there that night and they don't fit in. >> what's term for a minute. tell us, c-span is also a record in this, tell the audience kind of what you did and what you saw, what kind of risks you took, what kind of journalists

like yourself face trying to report on the conflict. >> well, this was the first conflict i was in where they didn't have supremacy. so you are exposed 24 hours a day to these types of attacks and you basically can't run away from a fighter jet. so that is a problem. we were in places like iraq, the american bases. every night, every day and every night. you came to expect that. and when you go out you might face an idea at any moment. but you didn't have this constant year the other side could come out with such strong fire power and get to you any way. basically what would happen is we may be shown between 11 p.m. and three or 4 a.m.. so until about 11 or 12 p.m. and

the helicopters and fighter jets would come out and attack us and you would get shelled with long-range cannons and missiles and but not. >> how did you get in without getting into anything, something you wouldn't want to say publicly? and when did you go exactly? >> i was there at the beginning of september. basically they were taken over the border crossings so you are able to cross all of them and go in and move around in those areas. they are there again just because some of these roads are on their regime control and they show randomly. in the vehicles that drive around the road. >> what would you say is the strategy of the assad regime of the than survival? what are they trying and --

where are the tactics and strategies they are using for power? >> basically when they use the air force like this they are just trying to scare people because it's random bombing with no overall strategy and many of them fall on fields. when i was out they bombed us in a field far from the urban area. so you wonder why do they do that? many of the bombings do not lead to any casualties because they are just trying to scare them. they are trying to wear down the rebels and citizens that support them and they want them to know we are here and we are not going away. >> is that proving to be successful? >> at this point in time, no, it's not successful. you are not seen people -- with its dillinger, the regime is turning more and more people away. especially as we saw in the rural areas.

one of the villages i was in was a very prosperous village. a lot was stopped and you think they've benefited from the policy. it's not a poor village. but what we are seeing is the regime is turning these civilians who are either on offense or didn't like the idea of instability there was caused by the rebels and its shifting them toward seeing that the regime is barbaric because of what it is doing. that's the way a lot of these people feel. they just don't trust the regime anymore and they are very angry that they would go out and target civilians on this level. that said, the regime still has support and you are not going to see this a lot in the media because you are not going to talk to a lot of these people and they go out into syria and they think people are saying these things because they're scared. i was able to spend some time with some syrians when i was in the region from damascus and

they really supported the regime. they did not like the rebels. they did not like what they were doing. >> and what sort of ethnic or class were these people from? >> these were sunnis comer urban sunni, middle class sunnis and they were just not supportive of the revolution. you still have that like i said in these villages, the sunni villages and aleppo still support to the regime. >> and what is your prognosis for the regime? >> eventually the regime is going to fall. they can't sustain this over the long term. they can't win the war. they've not taken -- the rebels haven't taken any of the cities that the regime is just focused on putting out brush fires in too many places and it can't do it. it's gradually losing more and more. >> what would it take from -- once we get past this election

whether it is a romney administration or obama administration -- what could that administration do to actually change the facts on the ground? >> the next administration needs to understand this regime has interests. it has legitimate security concerns, and we have to address them and give them a soft landing and graceful exit. and allow them to move into these alawites area like in kurdistan. >> so you can imagine them as sort of -- how would that operate in the sort of guaranteed safe havens? >> exactly. you could put a buffer of international troops. they would still be able to hold onto their weapons if they move their for exactly that reason.

and the international community gives them assurances and over a generation were to they could move into integrating that area back into syria. >> he said the move the weapons into the alawite area. what is the evidence for that? >> we know the weapons are removed and some people think because they were going to move them against the civilian population but they were most likely moved because the guarantee if damascus false the alawis could move because you can't go up against chemical weapons. you can go up against the long range and what not, but nobody wants to go against chemical weapons. >> and so how long was this most recent trip? when was it exactly? >> it was september. >> for how long? >> about ten days. >> how did you travel around?

>> the family helped us out. they had villages and open their homes to us and they took us in and took us around. we were with fighters from their unit. the families were each in different units and they took care of us. >> what do you think -- here at new america it was believed to be about 800 militia. are there militaries that are particularly valuable or successful or is it just the small groups that are each handling their own little region? >> there are the italians and brigades that are moving out that we can talk about. the organizations are i can't remember five or six people on there and then you have the brigade units under them so we

have a structure. i don't know but i do know of there is coordination its horizontal coordination between the individual units because when they get together they want to carry an operation in individual unit can't do it alone. this and activities in libya the syrian rebels have a more sophisticated strategies and tactics. >> they get together at night and talk about what they would do the next day. the operation is planned and carried out on the syrian side the sophistication people are learning, civilians are losing the intricacies of the war and how to scope out and initially come out with a plan and scope

out the place and how to decide how many fighters. then with the operation will look like. from the top to the bottom they are getting very good. >> the no-fly zone initially the regime is bases, islands in the city of rebels and they would have to give up these areas because you're using the bases in about three or four air bases. it has an air corridor they can struggle supplies in and what not and it's using that as the base to bomb the region. it would have to fall back. it would have to fall back from those areas and to the predetermined areas that would be of strategic interest for the regime. and that what happened at the beginning. the regime would still have long range, the same problem that we saw in libya. the regime would still of long-range cannons and missiles that the rebels don't have and

on the front lines the regime was pushing people back. >> in libya? >> yeah, what happened was a unique situation because the rebels were stopped on the roads between benghazi and tripoli, benghazi certain and basically in libya the last army tha was able to move from east to west where the air of this it hasn't happened since then. so they got stalemated in the desert and then you have a unique situation of misrata and the city which was an arab city so there was a lot of cohesiveness among these people and they had an airship, so they could bring supplies. these were the things that would

eventually win the war. when the west filed the no-fly zone early on it's okay the no-fly zone they would move from east to west. but then the war was still made it very quickly. and then what you had was a credible explanation. you went from six planes to helicopters, the french brought in helicopters a couple months later because the needed more precision to be able to bomb the regime targets and then you dust powder on the ground and brought special forces, western special forces to work with the rebels. there was a gradual escalation. >> should that happen in syria? >> i think that the problem in syria, we have the no-fly zone and there is no guarantee that would lead to the victory. what we need to do is try to work to find and negotiate a settlement that gives them a soft range at this point in time. >> do you think the regime has had plenty of time to think about sort of a negotiated

settlement? do you think they have any appetite for one? >> i think that the regime has made many bad decisions along the way. many points along the way. it could have reduced tensions and even may be ended the war to make it hasn't shown the strategics and insights that a man like assad would have to be as the magazine interesting in assad's approach dealing with internal dissent. >> he did the rule for 30 years in the country where no leader ruled for five years and independence i think in 1946. >> his son seemed to have adopted the same approach which is repression. a sufficiently high level seems to work. >> he didn't move -- going back to aleppo if you use force you have to come out strong with

literally gone and he didn't do that. >> so rules as friedman says. >> i don't advocate violence, but maybe he gets a raw deal. he wasn't a ruthless man like saddam hussein was. he allowed pockets of stability and professional syndicates some level of society in a country like libya where saddam didn't. such as mubarak in egypt and ben ali and tunisa. he has that middle ground. if you read the conversations of the clinton tapes, he expresses

concern and clinton is very sympathetic with these. so it's a much better pr organization. >> okay. >> he focused too much on the conspiracy theory of why certain things happened in the region. >> turning to egypt you've interviewed a lot of people in the jihadists movement recently. what is -- and you mentioned the 1990's obviously we're basically that the egyptians put down sort of the islamist -- many islamist insurgencies and also the jihadists groups lost the massacre in 77 mur 56 tourists were hunted down and stabbed to death. it was kind of the end of the jihadi movement -- >> which by the way the regime was against. >> the question is is there any

like that al-zawahiri was able to sort of resuscitate an al qaeda-like group in egypt or were there other jihadi groups or have the egyptians gone that and see that was sort of a dead end? how do you see the sort of militant movement in egypt playing out? >> here's the thing. all of his friends had entered the political process. they renounce violence. so you have the islamist jihad group, the leaders and in the mid level guys increased the process started with the cease-fire in '97 and gradually over the next decade a lot of these people were released. as the ideologue and then after the revolution on the side, so

these people then moved straight out. >> and he was out of jail now. >> yes, mohammad is a different cloth. he wasn't in prison if those people that the time. there was a transformation in the 1980's. one of them said we were young. we didn't understand things. we read the book. he was friends with the man who assassinated sadat. the most senior people started this process in 1997 so what happened this year of the organization to enter the political process and elements from the groups that were not leaders, they were not political leaders or military leaders or administrative leaders. they decided we want to blame onto our jihad roots.

they don't have the experience now to create new organizations. it's we to take them a lot of time when they want to do that. and we have some of these people on the ground trying to move and shift and operate all these people who at least in march of 2011 is when the presents were opened. >> new signs meaning what? >> certain people have come on the radar, the people but follow these things and there is a cause for concern that some of these people are establishing camps. they are going out in the population. >> establishing camps where? >> some in libya and some in egypt. >> do they call themselves al qaeda? how do they self identify? >> i don't think they would call themselves like al qaeda. from what i understand they want to be al qaeda. >> any sense of size?

>> i can't give you an estimate. >> have they done anything in egypt? >> well, you know, we have seen the jihadists in a sign -- sinai. >> they killed a lot of the ringleaders in the attacks. >> if you can wait for the microphones and identify yourself a question rather than a statement for this gentleman here. >> ibm tallman, former initio executive debate de -- former ngo executive. we are wondering what is happening on the northern part of syria with regard to turkey. you mentioned it is an open border and you can come again

like early on and i am wondering with the russian confiscated plame and the shelling what your assessment is with turkey's's future in the conflict and on a personal note how badly damaged is the historical aleppo? >> well, turkey has the bad dilemma on its hands. you've seen the influx of the refugees. they don't have the infrastructure to host them. the condition of the camps is very bad. you have to walk very far to get to the bathroom, cemetery areas. they don't have factors outside the refugee camps. the other side turkey has is in the region there is a large alawite community. i would have to look at my notes again. these people don't want to have anything to do with the syrians. we had protests every day. i mean every day there were

protests by these left-wing groups against syrians. i think once we got tear-gas by the police, syrians had been told by the authorities they shouldn't be in certain areas for their own good because the locals might beat them up. so turkey has that problem. it's trying to pull back into this especially what happens turkey is a member of nato so any attack against turkey is an attack against every nato member but the haven't stepped up to the plate. >> i wonder why that is. estimate because they don't want to get involved in this right now. the united states makes the alliance and doesn't want to get involved in these things right now. so, turkey -- with turkey's

strong response it is then trying to draw for the syrians and then higher casualties than the turkish side and you say what's going on in the western powers. it's a very bad a dilemma right now. i would not want to be there at this point. >> [inaudible] >> historical but i don't know, i have not seen those areas. you know, the old city has been blown. there could be some damage. it's a beautiful place when i visited there and everybody loves syria, loves the middle east and the monuments, what ever. we just cry every day. we grieved. >> this gentleman in the front. >> thank you. george mason university. i want to thank you for a fascinating presentation.

i am intrigued by your presentation that a solution might be to allow the regime to retreat to the alawite heartland on the coast. i would like to press you how we can incentivize them to do this. it strikes me that what you are offering them is a carrot that in a situation like this eight stochastic be applied as well. i think peter referred to read what can get them to actually accept this as a solution and also, what do we know about the ethnic composition of this coastal region. how alawite is that region? is there another population that is going to be unhappy about this and also the whole reaction to a essentially what will be a dish facto secession how is this going to be responded to? thank you. >> i like to talk to my old friend who gives me great ideas to think about. basically, what we need to do is

you are going to give an incentive that hopefully at some point in time they will find out everything is lost and have to go in or you can threaten the use of force that you are going to escort the west and then get involved and then realize it is going to be all over for them at that point in time and then they have to move into those areas and they realize if somebody comes in and there is a very cold water movement with nixon. it's all over. the problem is we don't know how the regime functions and who is making the decisions and the regime at times is delusional in what it says and what it does. so, the option works on a rational basis and the leader isn't rational then it's not going to get done. >> is there any evidence that he's an and rational actor?

>> yes, he's not a rational actor. >> what would you say the main piece of evidence are? >> discussions with people that have met him and talked to him he says different things with different people. he is very moody. there are qustions of some issues with him on that level. >> like bipolar? be more specific. >> i would think that it would take it beyond that. >> interesting. that's not really been much addressed in any of the coverage. >> well, people don't really talk about him. you can't say those things with any certainty and then you are bringing in the right to say things like that. but he doesn't have the stability that we see with others. >> but it seems if you look at the asia strategy, he's been sort of gone only in yemen has

there been a successful negotiated settlement of the former president and there is a big -- there are differences between yemen and syria that you can comment on. but yemen was a somewhat democratic state by regional standards. i mean, there was political parties that had some degree of freedom. there was a authoritarian democracy for the wanted a better term. whereas syria seems to be a slightly different animal. there was enough space to kind of come up with this compromise. >> the regime can't negotiate position. it's even worse in egypt. what happened is in egypt the ruler is the last man that could have ever challenged mubarak was the defense minister moved aside in the mid 1980's. he wanted to become vice

president and he wasn't. he had a minister of defense. the regime never had any dealings with the opposition group, the labor party and what not. they had no power and they didn't have that relationship. so, but in yen in the state was so weak -- yemen he always had contact. you're not going to get anything. >> sebelius suggest that it's going to be pretty hard to deal with. >> and what is and be a negotiation between the regime in the west and the level. but when you look at the revolt in the arab spring only in libya

did we see violence. only a few hundred in egypt and that was before the tanks were rolled out. yemen she used violence as a tool. she knew he couldn't continue but he wanted to get those assurances that he needed. in libya when half the country was lost in a few days we see any level of violence that approximated what happened in syria that's because gadhafi was very upset and wanted to get the country back, so he -- and the rebel advised was very low compared to what we saw in syria. now that we know what happened in these areas under the role of

the regime's control, the level of violence used against libya was very low with what we've seen in syria or what the people do in syria which is horrible atrocities. >> the gentleman over here. wait for the mic. >> william and that is a segue to the discussion about the political opposition. the u.s. government has been trying to talk to the snc with turks. my understanding and i hope you know more about this and i do is the snc isn't an effective organization which leads to the fact there isn't anybody for the u.s. or syria or the u.n. or anybody else really to talk to about cutting a deal or finding some way out other than continued bloodshed.

you talk a little bit about the political opposition? >> that's a good question. basically the snc is a great society. >> what does it stand for? >> it was a group created in the aftermath of the revolution. they have no support on the ground. the people don't even know them, their names and faces and they simply don't care. they are not in the country. some of them have come in and distributed aid in the northern areas that have been liberated and they are very quiet. they are not close to the front lines, and there is a lot of fighting. a lot of them have resigned and the islamists are taking over, certain factions are being supported. the french are trying to really more of them into the cohesive organization and it's not working, it's not going anywhere. i don't think you are going to

see anything out of the absence come out. that said there are certain people on the snc that i.t. would be good leaders. the key wife might have had good ideas and they are upright individuals and they don't have an agenda they just have syria's interest but they don't have the legitimacy on the ground. >> given what you described in syria and libya and some degree egypt, was the arab awakening worth it? >> well, you know, that is a great question, peter. it depends on where you stand and also what point in time you look at it. the birth pains as someone once said in 2006 it's going to take a lot of time to transition. you need to rebuild the institutions coming and you can't just impose democracy. the would have been better if it was a transitional stage.

i remember when the clinton administration came in office in 1992 they sent the secretary of state for near east affairs to talk to bill -- mubarak and he said the islamists will take over and that was the end of that and then the americans focused on the peace process instead. we have made mistakes in the middle east, and we should have pushed for some type of opening so we could have had a process and not just something that comes out of nowhere. people are very frustrated in these societies and they are not going to understand that democracy takes time. the regime -- the governments are not as strong. you are already hearing a lot of backlash against the democracy in the current states like egypt and libya. they want strong leadership. they want stability. >> sort of like the in nostalgia

of russia and certain parts of the russian society. >> but that didn't happen in the year and a half after it was gone but they did happen in egypt after morsi because he was a standard bearer of the regime because he was a former transportation general of the transportation minister and then mubarak became the prime minister in the last cabinet. >> i guess eject could -- egypt could -- there are several societies that are space and also have a strong military. a model that would be turkey and a more successful model would be pakistan right now. as egypt a less successful version of that? >> the military is always going to be very strong in this society because first of all the talk about the threat of israel. they need to have a strong military. the military also controls between ten to 15% of the economy based on its factor.

the military gets a good portion of the budget for the defense spending. so you're always going to have a strong military in egypt but it's also the strongest state institution. the military didn't have that in libya. the libya military was torn apart in the war of 1987 because gadhafi dismantled it. so you are going to always have that in egypt. where i was surprised was the swiftness with which the military described the forces and took over power after mubarak collapsed with such swiftness. when morsi came into power he just fired everybody. so, there was very interesting. >> and perhaps hardening. >> -- heartening. >> if you were going to have

that type of the civilian leaders assert their powers so forcefully early on. >> pakistan in 2002 the pro taliban religious parties controlled two elbe four and in 2008 they got 2% of the vote and lost control and lost control because basically they haven't delivered. so how would you see the fortunes and address that in some degree in the remarks so how is he doing in visit a large movement to make any sort of large general prediction about them with 25% of the vote that implies they are doing well and lots of parts of egypt how would you assess the political prospect or is it too early to tell? ..

>> the people aren't really going to go for that. and they're not going to be able to, also, act on the religious side. people want, they want economic progress, people want jobs, they want an end to corruption, they want, um, they want more responsive government to the needs of society. and that's not going to happen because you don't get that with democracy. you need to change, a complete change in the way people think. you feed to move from traditionalism to modernity. it's what the georgetown scholars called neopatriarch si. you put a